Exhibit 7.4

-Refer to Exhibit 7.4,which shows short-run average cost curves.Which curve shows the short-run average total costs for a small plant?
A)A to A'
B)B to A'
C)B to B'
D)C to B'
E)C to C'

Question

Exhibit 7.4
 
-Refer to Exhibit 7.4,which shows short-run average cost curves.Which curve shows the short-run average total costs for a small plant?
A)A to A' 
B)B to A' 
C)B to B' 
D)C to B' 
E)C to C'

Quizplus · Accepted Answer

The curve that shows the short-run average total costs for a small plant is A to A'. This is because the small plant has a lower fixed cost than the large plant, so its average total cost curve will be lower at all levels of output.

Exhibit 7.4 -Refer to Exhibit 7.4,which Shows Short-Run Average Cost Curves.Which Curve