Figure
Figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC 1 corresponds to Plant size 1, SRATC 2 corresponds to Plant size 2, and so forth.
-In Figure, what is the total cost of producing 1,500 basketballs per week assuming the firm uses the optimal plant size?

Question

​Figure
  Figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC 1 corresponds to Plant size 1, SRATC 2 corresponds to Plant size 2, and so forth.
-In Figure, what is the total cost of producing 1,500 basketballs per week assuming the firm uses the optimal plant size?

Quizplus · Accepted Answer

The total cost of producing 1,500 basketballs per week using the optimal plant size is $22,500. This is calculated based on the cost structure and economies of scale associated with the optimal plant size for that level of production.

​Figure Figure Shows the Long-Run Average Total Cost Curve

Figure Figure Shows the Long-Run Average Total Cost Curve