Top Posters
Since Sunday
7
n
3
j
3
o
2
x
2
c
2
2
p
2
n
2
3
2
C
2
z
2
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Student06 Student06
wrote...
Go to Answer
Posts: 125
Rep: 0 0
A year ago

The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes.

Short description: A graph plots output against cost. Long description: The horizontal axis represents output. The vertical axis represents the cost. The graph plots four U-shaped curves. A large U-shaped curve representing LRAC passes through the points, A, C, E, and F. Vertical dashed lines are extended from A, C, E, a point, and F to meet the horizontal axis at Q subscript 1, Q subscript 2, Q subscript 3, Q subscript 4, and Q subscript 5. It encloses three small U-shaped curves. The first curve on the left represents SRATC subscript 1 and it intersects the large curve at A and passes through a point, B. The second curve at the center represents SRATC subscript 2 and it intersects the large curve at E. It also intersects the first curve at a point and it passes through a point, D. The third curve on the right represents SRATC subscript 3 and it intersects the large curve at F. It also intersects the second curve at a point.

FIGURE 8-2

Refer to Figure 8-2. If this firm is producing at point B, then



▸ this firm is experiencing decreasing returns to scale.

▸ this firm could produce the same level of output at a lower cost with plant size 2.

▸ plant size 1 is optimal.

▸ it should employ more of its variable factors of production.

▸ this firm is producing a level of output that is efficient in the long run.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
Read 35 times
1 Reply
Replies
Answer verified by a subject expert
ordinarykathyordinarykathy
wrote...
#1
Posts: 125
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

Student06 Author
wrote...

A year ago
This helped my grade so much Perfect
SupremeDJ
wrote...

Yesterday
Thanks
kamikazekota
wrote...

2 hours ago
This site is awesome
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  959 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 2658
  
 293
  
 145
Your Opinion
Which industry do you think artificial intelligence (AI) will impact the most?
Votes: 352
Previous poll results: Which country would you like to visit for its food?