Multiple Choice
-Which of the following statements would be true about a firm which has excess capacity?
A) Its average total cost would be at a minimum.
B) Its average total cost would not be at a minimum.
C) Its average total cost may or may not be at a minimum but the firm would not be at economic capacity.
D) It would not be at capacity output,but its average total cost would be at a minimum.
E) It would need to reduce output to achieve minimum average total cost.
Correct Answer:
Verified
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