Exhibit 7.4 -Refer to Exhibit 7.4,which shows short-run average cost curves.For output more than q_b,when is average cost the lowest? A)when the plant is large B)when the plant is medium-size C)when the plant is small D)at an output level less than q E)at an output level more than q_b

Question

Quizplus · Accepted Answer

In the short-run average cost curves, a larger plant typically has lower average costs for higher levels of output beyond q_b due to economies of scale.

Exhibit 7.4 -Refer to Exhibit 7.4,which Shows Short-Run Average Cost Curves.For Output