Figure 5.1

-Refer to Figure 5.1. At a quantity of 10, the firm should ____, but at a quantity of 75, the firm should ____.
A) leave production unchanged; also leave production unchanged
B) leave production unchanged; decrease production
C) increase production; decrease production
D) increase production; leave production unchanged
E) decrease production; increase production

Question

Figure 5.1
 
-Refer to Figure 5.1. At a quantity of 10, the firm should ____, but at a quantity of 75, the firm should ____.
A) leave production unchanged; also leave production unchanged 
B) leave production unchanged; decrease production 
C) increase production; decrease production 
D) increase production; leave production unchanged 
E) decrease production; increase production

Quizplus · Accepted Answer

At a quantity of 10, the firm is producing below the point of minimum average total cost, so it should increase production to reach that point. At a quantity of 75, the firm is producing beyond the point of minimum average total cost, so it should decrease production to reach that point. Therefore, the correct choice is to increase production at 10 and leave production unchanged at 75, which is only option D.

Figure 5.1 -Refer to Figure 5.1. at a Quantity of 10, the Quantity