-Refer to the Graph Above to Answer This Question

question 112

Multiple Choice

-Refer to the graph above to answer this question.All of the following statements except one are correct.Which is the exception?

• A)Plant 1 has excess capacity at output level Q₁.
• B)Output level Q₃ is economic capacity for plant size 1.
• C)Output level Q₃ can be produced for the same cost in plant 1 and in plant 2.
• D)Plant 2 achieves minimum efficient scale.
• E)Increasing returns to scale are experienced when output is increased from Q₁ to Q₄.

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Definitions:

Inflation Rate

The rate at which the general level of prices for goods and services is rising, thus eroding purchasing power.

Nominal Rate of Interest

The stated interest rate of a bond or loan, which does not account for inflation or the compounding of interest.

Purchasing Power

The ability of an individual or entity to buy goods and services, essentially reflecting the value of money in terms of the quantity of goods or services it can buy.

Inflation Rate

Inflation rate is the percentage increase in the general level of prices for goods and services over a period, typically expressed as an annual rate.