When a plant is operating at the level of output where its short- run average total cost is at its minimum,
A) more of the variable factor of production should be employed.
B) average fixed cost is at a minimum.
C) the plant is operating at its capacity.
D) marginal cost is at a minimum.
E) average variable cost is at a minimum.

Question

Quizplus · Accepted Answer

When a plant operates at the level of output where its short-run average total cost is at its minimum, it is operating at its capacity, meaning it is producing at the most efficient scale in the short run.

When a Plant Is Operating at the Level of Output