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.If the firm is currently producing an output of 20 using Plant 1 and it decides to build Plant 2,what will happen to its short-run average cost if its output remains unchanged?
A)It will remain unchanged.
B)It will rise by $3.
C)It will fall by $3.
D)It will fall by $11.
E)It will rise by $11.

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.If the firm is currently producing an output of 20 using Plant 1 and it decides to build Plant 2,what will happen to its short-run average cost if its output remains unchanged?
A)It will remain unchanged. 
B)It will rise by $3. 
C)It will fall by $3. 
D)It will fall by $11. 
E)It will rise by $11.

Quizplus · Accepted Answer

The Answer of 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.If the firm is currently producing an output of 20 using Plant 1 and it decides to build Plant 2,what will happen to its short-run average cost if its output remains unchanged?
A)It will remain unchanged. 
B)It will rise by $3. 
C)It will fall by $3. 
D)It will fall by $11. 
E)It will rise by $11.

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