A firm moves from one SRATC curve to another

Name: A firm moves from one SRATC curve to another
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

In the short run, a firm's plant size and capacity are fixed, meaning it operates on a single short-run average total cost (SRATC) curve based on its current capacity. Moving from one SRATC curve to another implies a change in the firm's capacity or scale of operations, which can only happen in the long run when the firm can adjust all of its inputs, including plant size and equipment.

A Firm Moves from One SRATC Curve to Another