The Figure Given Below Shows Three Short Run Average Total

question 53

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-When a firm is experiencing economies of scale, it will:

• A)underuse a larger plant size than is indicated by short-run efficiency concerns.
• B)underuse a smaller plant than is indicated by short-run efficiency concerns.
• C)overuse a larger plant size than is indicated by short-run efficiency concerns.
• D)overuse a smaller plant size than is indicated by short-run efficiency concerns.
• E)produce at the minimum short-run and long-run average costs.

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Definitions:

Housing Market

The supply and demand for residential properties, influenced by factors such as interest rates, economic conditions, and government policies.

Elastic

A term used to describe a situation in which the demand or supply for a good or service changes significantly when its price changes.

Price Ceiling

A legal maximum price that can be charged for a good or service, usually imposed by a government to prevent prices from becoming too high.

Crude Oil

An organic, unprocessed substance found in nature, made up of hydrocarbon deposits along with other organic matter, known as crude oil.