The Graph Below Includes Two Plant Sizes as Illustrated by AC₁

Multiple Choice

The graph below includes two plant sizes as illustrated by AC₁ and AC₂.

-Refer to the graph above to answer this question.All of the following statements except one are correct if a small market limits a firm's output to Q₁.Which is the exception?

A) The firm is not achieving capacity output in plant 1.
B) The firm is not achieving minimum efficient scale.
C) The firm is experiencing excess capacity.
D) The firm would benefit from a larger market.
E) Building a larger plant would lower the firm's average cost of producing Q₁.