The Following Figure Shows the Long-Run Average Cost Curve for a Tire

question 144

Multiple Choice

The following figure shows the long-run average cost curve for a tire manufacturer and the long-run average cost curve for a rubber producer. If ten pounds of rubber is required for producing one tire, which of the following is true?​ ​
Figure 14.1
​

• A)The tire manufacturer should integrate backward into producing rubber.
• B)The tire manufacturer should produce more than 200,000 tires.
• C)The tire manufacturer should buy rubber rather than produce it.
• D)The rubber producer must be a monopolist.
• E)The minimum efficient scale of rubber production is 2 million pounds.

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