The Following Question Are Based on the Following Diagram of the Average

question 74

Multiple Choice

The following question are based on the following diagram of the average cost curves for three different-sized plants:

-If the firm is still in the planning stages of plant construction,it should choose the

• A) small plant if it expects an output rate below 3,000 units per day.
• B) large plant regardless of output because it has the lowest per unit costs.
• C) medium-sized plant because it would give the firm the most flexibility, allowing it to produce any output between 0 and 3,000.
• D) small plant if it expects an output rate below 1,000 per day.
• E) medium-sized plant because it has the advantage of increasing economies of scale.

---

Definitions:

Enforceable Property Rights

The legal recognition of an individual's or entity's claims to ownership, which can be defended and upheld in court.

Closer To Extinction

A state or condition where a species is at greater risk of ceasing to exist.

Private Property

The legal right that allows individuals to own, use, and transfer objects, land, and intellectual property.

Resource's Current Price

The current market price at which a specific resource is traded.