-Refer to the graph above to answer this question.Suppose that the firm is producing an output between Q₁ and Q₂.All of the following statements,except one,are correct.Which is the exception? A)The firm is neither too large nor too small. B)The firm is certainly achieving economic capacity. C)The firm might or might not benefit by increasing or decreasing its output. D)The firm could not benefit by increasing or decreasing its scale of plant.

Question

Quizplus · Accepted Answer

The exception is that the firm is certainly achieving economic capacity. Without seeing the graph, the general principle is that being within a certain output range doesn't guarantee the firm is operating at economic capacity, as economic capacity involves producing at the lowest average total cost, which can't be confirmed solely based on output range.

-Refer to the Graph Above to Answer This Question