Figure 11-10 -Refer to Figure 11-10. Suppose for the Past 8 Years

question 2

Multiple Choice

Figure 11-10
-Refer to Figure 11-10. Suppose for the past 8 years the firm has been producing Q_d units per period using plant size ATC₄. Now, following a permanent change in demand, it plans to cut production to Q_c units. What will happen to its average cost of production?

• A) In the short run, its average cost falls from $47 to $41, and in the long run, average cost falls even further to $37.
• B) In the short run, its average cost rises from $47 to $55, and in the long run, average cost falls to $41.
• C) In the short run, its average cost falls from $47 to $37, and in the long run, average cost rises to $41.
• D) In the short run, its average cost rises from $47 to $55, and in the long run, average cost falls to $37.

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Definitions:

Conflict Management

The practice of identifying and addressing disputes in a fair, effective, and reasonable manner to prevent escalation.

Minor Problem

A relatively unimportant or trivial issue that does not have a significant impact on the overall situation or outcome.

Partner

Refers to a person who takes part in an undertaking with another or others, especially in a business or company with shared risks and profits.

Integrative Strategy

An approach that combines different methods, ideas, or systems into a comprehensive plan to solve problems or achieve objectives.