Figure 11-11 Figure 11-11 Illustrates the Long-Run Average Cost Curve for a Average

question 113

Multiple Choice

Figure 11-11

Figure 11-11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc.
-Refer to Figure 11-11.If the firm chooses to produce and sell 25,000 frames per month by operating in the short run with a scale operation represented by ATCc ,

• A)the firm will not be operating efficiently.
• B)the firm will be operating efficiently.
• C)the firm would lower its average costs by reducing its scale of operation.
• D)the firm will not be able to earn a profit.

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