The Figure Below Shows a Family of Cost Curves for a Firm

question 51

Multiple Choice

The figure below shows a family of cost curves for a firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes. FIGURE 8- 3
-Refer to Figure 8- 3. Each of the three SRATC curves shows

• A) the output that is possible when all factors of production are fixed.
• B) the lowest cost attainable, given that the plant size is the largest it can possibly be.
• C) the lowest cost attainable, holding the plant size constant.
• D) optimal plant sizes in the long run.
• E) technically inefficient methods of production, given that they lie above the LRAC.

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