-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). What is Dustin's long- run average cost if the output is 3,000 copies per day?
A) 5.0 cents per copy
B) 8.5 cents per copy
C) 3.7 cents per copy
D) More information is needed to determine the long- run average cost.

Question

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). What is Dustin's long- run average cost if the output is 3,000 copies per day?
A) 5.0 cents per copy 
B) 8.5 cents per copy 
C) 3.7 cents per copy 
D) More information is needed to determine the long- run average cost.

Quizplus · Accepted Answer

In the long run, a firm will choose the plant size that minimizes its average total cost for the given level of output. At 3,000 copies per day, the plant with the lowest average total cost should be selected, which corresponds to the choice indicating 3.7 cents per copy.

-Dustin's Copy Shop Can Use Four Alternative Plants