This figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC₁ corresponds to Plant size 1, SRATC₂ corresponds to Plant size 2, and so forth.
FIGURE 7-6

-Refer to Figure 7-6. Which plant size is optimal for the firm to produce qA units of output each week?
A) Plant 2
B) Plant 3
C) Plant 4
D) Plant 5

Question

This figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC₁ corresponds to Plant size 1, SRATC₂ corresponds to Plant size 2, and so forth.
FIGURE 7-6
 
-Refer to Figure 7-6. Which plant size is optimal for the firm to produce qA units of output each week?
A) Plant 2 
B) Plant 3 
C) Plant 4 
D) Plant 5

Quizplus · Accepted Answer

Without access to Figure 7-6, the correct answer cannot be determined directly from the question. However, the optimal plant size for producing a specific quantity of output, qA, would typically be the one that minimizes the average total cost (ATC) for that level of output.

This Figure Shows the Long-Run Average Total Cost Curve for a Firm