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. Suppose this firm is producing output level Q₃ with plant size 2. Now suppose this firm changes to plant size 3 and is producing output level Q5. We can say that

• A) output has increased exactly in proportion to the increase in inputs.
• B) output has increased less than in proportion to the increase in inputs.
• C) output has increased more than in proportion to the increase in inputs.
• D) this firm has experienced economies of scale.
• E) the firm is then operating with the optimal plant size.

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Definitions:

Auditory

Refers to anything related to the sense of hearing or sound perception.

Olfactory Hallucinations

Sensory hallucinations involving the perception of smells that are not present in the environment.

Auditory Hallucinations

The experience of hearing sounds or voices that are not present in the external environment.

Visual Hallucinations

Hallucinations in which a person may either experience vague visual perceptions, perhaps of colors or clouds, or have distinct visions of people, objects, or scenes that are not there.