The Following Figure Depicts a Firm's Long-Run Average Total Cost

question 249

Multiple Choice

The following figure depicts a firm's long-run average total cost and selected short-run average total cost curves.

-Refer to the figure above.The firm is currently producing at C.In the short run,the firm should ________.

• A) reduce its production to Q₁
• B) not change its production plan
• C) invest in capital and produce at a lower cost
• D) increase its production to Q₃ to benefit from economies of scale

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Definitions:

Need Allocation

The process of determining and distributing resources or responsibilities among parties based on their needs or requirements.

Magnitude

The size, extent, or importance of something, often used in scientific contexts to measure quantities or effects.

Contribution

The act of giving or adding to something with the purpose of improvement or making a difference.

Commitment

A pledge or binding agreement to do something or remain loyal to a cause, person, or institution.