Figure 6.11 Figure 6.11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATC a , ATC b , and ATC c .
-Refer to Figure 6.11.In the short run,if the firm sells fewer than 5 000 picture frames per month,__________.

Question

Figure 6.11  Figure 6.11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATC a , ATC b , and ATC c .
-Refer to Figure 6.11.In the short run,if the firm sells fewer than 5 000 picture frames per month,__________.

Quizplus · Accepted Answer

In the short run, if the firm sells fewer than 5,000 picture frames per month, it should produce with the scale of operation associated with ATC_a because this is the lowest point on the ATC curve and represents the most efficient scale of operation for this level of output.

Figure 611 Figure 6