The Figure Given Below Shows Three Short Run Average Total

question 23

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm. Figure 7.3
- Refer to the Figure 7.3.In the long run,an increase in production from Q₁ to Q₃ would:

• A)increase average cost by C₄ - C₁.
• B)increase average cost by C₃ - C₁.
• C)increase average cost by C₃ - C₂.
• D)decrease average cost by C₃ - C₁.
• E)decrease average cost by C₃ - C₂.

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Definitions:

Sales Volume

The total number of units sold within a specified period, often used to measure a company's activity level or performance.

Local Bakery

A bakery that operates within a community, offering freshly baked goods to local consumers.

Product Prestige

The perception of a product as being high in quality, status, and value, often associated with luxury brands or items that signify a higher social or economic standing.

Limited Availability

A situation or condition where a product, service, or resource is not readily accessible or is available in restricted quantities.