Exhibit 14.1

-Refer to Exhibit 14.1,which shows the long-run average cost curve for a tire manufacturer and the long-run average cost curve for a rubber producer.If ten pounds of rubber is required for producing one tire,which of the following is true?

Question

Exhibit 14.1
  
-Refer to Exhibit 14.1,which shows the long-run average cost curve for a tire manufacturer and the long-run average cost curve for a rubber producer.If ten pounds of rubber is required for producing one tire,which of the following is true?

Quizplus · Accepted Answer

Based on the given information, it would be more efficient for the tire manufacturer to purchase rubber rather than produce it themselves. This is because the long-run average cost curve for producing rubber is lower than the long-run average cost curve for producing tires. Therefore, the rubber producer can produce rubber at a lower cost than the tire manufacturer can. By purchasing rubber rather than producing it themselves, the tire manufacturer can take advantage of this lower cost and reduce their overall production costs.

Exhibit 14.1 -Refer to Exhibit 14.1,which Shows the Long-Run Average Cost Curve