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Use the following to answer questions:
Figure: Long-Run and Short-Run Average Cost Curves Use the following to answer questions: Figure: Long-Run and Short-Run Average Cost Curves   -(Figure: Long-Run and Short-Run Average Cost Curves)  Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm is producing at point C on the ATC<sub>2</sub> but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale. A)  smaller; economies B)  smaller; diseconomies C)  bigger; economies D)  bigger; diseconomies
-(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm is producing at point C on the ATC2 but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale.


Definitions:

Short-Term Debt

Borrowings that are due to be paid back within a short period, typically less than one year.

Long-Term Equities

Investment securities that represent ownership in a company or corporation and are held for a period longer than one year.

Maturity Matching

A financial strategy that entails matching the duration of assets and liabilities to minimize risk associated with cash flow mismatches.

Project Duration

The total time required to complete a project from start to finish.

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