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The Graph Below Includes Two Plant Sizes as Illustrated by AC1

Question 3

Multiple Choice

The graph below includes two plant sizes as illustrated by AC1 and AC2.
The graph below includes two plant sizes as illustrated by AC<sub>1</sub> and AC<sub>2</sub>. -Refer to the graph above to answer this question.Which of the following statements is correct if a firm is operating at point a on AC<sub>1</sub>? A) The firm has achieved capacity output. B) The firm is achieving MES. C) An increase in the output would not lower costs. D) Building a larger plant would result in lower long-run average cost. E) Building a larger plant would not result in lower long-run average cost.
-Refer to the graph above to answer this question.Which of the following statements is correct if a firm is operating at point a on AC1?


A) The firm has achieved capacity output.
B) The firm is achieving MES.
C) An increase in the output would not lower costs.
D) Building a larger plant would result in lower long-run average cost.
E) Building a larger plant would not result in lower long-run average cost.

Correct Answer:

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