Refer to the long-run cost curve for a firm. If the firm produces output Q₁ at an average total cost of ATC₁, then the firm is
A)producing the profit-maximizing output but is failing to minimize production costs.
B)incurring X-inefficiency but is realizing all existing economies of scale.
C)incurring X-inefficiency and is failing to realize all existing economies of scale.
D)producing that output with the most efficient combination of inputs and is realizing all economies of scale.

Question

Refer to the long-run cost curve for a firm. If the firm produces output Q₁ at an average total cost of ATC₁, then the firm is
A)producing the profit-maximizing output but is failing to minimize production costs. 
B)incurring X-inefficiency but is realizing all existing economies of scale. 
C)incurring X-inefficiency and is failing to realize all existing economies of scale. 
D)producing that output with the most efficient combination of inputs and is realizing all economies of scale.

Quizplus · Accepted Answer

The Answer of  Refer to the long-run cost curve for a firm. If the firm produces output Q₁ at an average total cost of ATC₁, then the firm is
A)producing the profit-maximizing output but is failing to minimize production costs. 
B)incurring X-inefficiency but is realizing all existing economies of scale. 
C)incurring X-inefficiency and is failing to realize all existing economies of scale. 
D)producing that output with the most efficient combination of inputs and is realizing all economies of scale.

Refer to the Long-Run Cost Curve for a Firm