The following figure plots Short Run Average Cost functions for small,medium,and large plants.Based on the figure and plots provided,for which quantity level is a medium plant the best choice?
A)Q₁
B)Q₂
C)Q₃
D)Q₄
E)Q₅

Question

The following figure plots Short Run Average Cost functions for small,medium,and large plants.Based on the figure and plots provided,for which quantity level is a medium plant the best choice? 
A)Q₁ 
B)Q₂ 
C)Q₃ 
D)Q₄ 
E)Q₅

Quizplus · Accepted Answer

At Q₂, the short run average cost is at its lowest point for the medium plant. For smaller quantities, a small plant is more efficient, while for higher quantities, a large plant is more efficient.

The Following Figure Plots Short Run Average Cost Functions for Small,medium,and