The following figure shows three different plant sizes and short-run average cost curves (SRAC), along with the long-run average cost curve (LRAC) for the industry.

-Refer to Figure .Which of the following statements is true?
A)is inefficiently large.
B)is inefficiently small for this market.
C)is likely to survive the competition with unchanged plant size.
D)and can improve their cost structures by resizing their plants to .

Question

The following figure shows three different plant sizes and short-run average cost curves (SRAC), along with the long-run average cost curve (LRAC) for the industry.

-Refer to Figure .Which of the following statements is true?
A)is inefficiently large. 
B)is inefficiently small for this market. 
C)is likely to survive the competition with unchanged plant size. 
D)and can improve their cost structures by resizing their plants to .

Quizplus · Accepted Answer

Resizing plants can lead to better cost structures by optimizing production efficiency and reducing costs.

The Following Figure Shows Three Different Plant Sizes and Short-Run