If a Competitive Firm Is Producing to the Left of the Minimum

question 104

Multiple Choice

If a competitive firm is producing to the left of the minimum point of its long-run average cost curve,then

• A)it cannot be producing its present output efficiently.
• B)it can reduce its unit costs by building a larger plant.
• C)it can still be in long-run equilibrium as long as P = SRATC.
• D)its profits will decrease if it builds a larger plant.
• E)it should shut down.

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