Refer to the information provided in Figure 9.6 below to answer the question(s) that follow. Figure 9.6 -Refer to Figure 9.6. Assume this firm is in a constant-cost industry. For this firm to ________, the firm must be producing q₃ units of output. A) be experiencing diseconomies of scale B) need to shut down C) be in long-run equilibrium D) need to cut back on production to lower average costs

Question

Quizplus · Accepted Answer

In a constant-cost industry, for a firm to be in long-run equilibrium, it must be operating where its marginal cost (MC) curve intersects the average total cost (ATC) curve at the minimum point of the ATC. This ensures the firm is producing at its most efficient scale, where it is covering all its costs, including the opportunity cost of capital, and earning normal profit but no economic profit.

Refer to the Information Provided in Figure 9