-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC₁), Plant 2 (ATC₂), Plant 3 (ATC₃), and Plant 4 (ATC₄).What is Dustin's long-run average cost if the output is 3,000 copies per day? A) 3.7 cents per copy B) 5.0 cents per copy C) 8.5 cents per copy D) More information is needed to determine the long-run average cost.

Question

Quizplus · Accepted Answer

The long-run average cost is determined by the plant with the lowest average total cost at the given output level. At 3,000 copies per day, Plant 1 (ATC₁) has the lowest cost of 3.7 cents per copy.

-Dustin's Copy Shop Can Use Four Alternative Plants