Below Is Short-Run Cost Data for Four Different Plant Sizes

question 87

Multiple Choice

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.

-Refer to the information above to answer this question.If the firm is currently producing an output of 20 using Plant 1 and it decides to build Plant 2,what will happen to its short-run average cost if its output remains unchanged?

• A)It will remain unchanged.
• B)It will rise by $3.
• C)It will fall by $3.
• D)It will fall by $11.
• E)It will rise by $11.

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Definitions:

Civilization

In anthropology, societies in which large numbers of people live in cities, are socially stratified, and are governed by a ruling elite working through centrally organized political systems called states.

Private Property

The legal right to own, use, and dispose of land, goods, or intellectual properties individually, distinct from public or communal ownership.

Hydroponic Farming

A method of growing plants in a water-based, nutrient-rich solution without soil.

Subsistence

The basic means by which individuals or groups support themselves at a minimum level of subsistence, often involving self-sufficiency without significant trade or economic exchange.