Exhibit 7-15 Long and Short-Run cost of Producing Color Printers If the firm represented in Exhibit 7-15 wants to produce output level Q₃, then in the long run it should build a plant size with average total cost curve of A)A B)B C)C D)A or B E)the question cannot be answered with the information given

Question

Quizplus · Accepted Answer

To produce the output level Q₃, the firm should build a plant with the minimum average total cost (ATC) curve. As we can see in Exhibit 7-15, the minimum ATC curve intersects the desired output level at point B. Therefore, the firm should build a plant with an ATC curve identical or lower than curve B in the long run.

Exhibit 7-15 Long and Short-Run Cost of Producing Color Printers