Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.

-Refer to the information above to answer this question.Which of the following should the firm consider doing if it is currently producing an output of 40 using Plant 2?
A)Build Plant 3 only.
B)Build Plant 4 only.
C)Build Plant 3 or 4.
D)Scale down its plant size.

Question

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.
 
-Refer to the information above to answer this question.Which of the following should the firm consider doing if it is currently producing an output of 40 using Plant 2?
A)Build Plant 3 only. 
B)Build Plant 4 only. 
C)Build Plant 3 or 4. 
D)Scale down its plant size.

Quizplus · Accepted Answer

The Answer is C

Below Is Short-Run Cost Data for Four Different Plant Sizes