The Table Below Contains Short Run Average Cost Data for Five

question 11

Essay

The table below contains short run average cost data for five different plant sizes for C3PO Technologies Ltd.

a)On the grid in the figure below,graph the short-run average cost curves for the five plants.
b)What is the right-size of plant for each of the following output levels:2,4,6,8 and 10?
c)Do a sketch of the long-run average cost curve in the graph above.
d)What plant size would C3PO need to use in order to achieve MES?
e)If C3PO is producing an output level of 6 in plant size 4,does excess capacity exist?

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Definitions:

Mergers

The combination of two or more companies into a single entity, typically to increase market share or reduce competition.

Standard Oil Case

A 1911 antitrust case in which Standard Oil was found guilty of violating the Sherman Act by illegally monopolizing the petroleum industry. As a remedy, the company was divided into several competing firms.

U.S. Steel Case

The antitrust action brought by the federal government against the U.S. Steel Corporation in which the courts ruled (in 1920) that only unreasonable restraints of trade were illegal and that size and the possession of monopoly power were not by themselves violations of the antitrust laws.

Cellophane Case

The Cellophane Case refers to a landmark antitrust case involving DuPont's monopoly on the cellophane market, highlighting issues of market definition and competition.