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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Definitions:

Sleepier

The state or quality of feeling or being more inclined to sleep or tiredness.

Awake

The state of being conscious, alert, and aware of one's surroundings.

Deprivation

The condition caused by a lack of necessary materials, comfort, or necessities for healthy living.

Sleepiness

A state of feeling drowsy or tired, often leading to a desire or need to sleep.