Figure 11-10
-Refer to Figure 11-10.Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4.Now,following a permanent change in demand,it plans to cut production to Qc units.What will happen to its average cost of production?
A)In the short run,its average cost falls from $47 to $41,and in the long run,average cost falls even further to $37.
B)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $41.
C)In the short run,its average cost falls from $47 to $37,and in the long run,average cost rises to $41.
D)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $37.

Question

Figure 11-10 
-Refer to Figure 11-10.Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4.Now,following a permanent change in demand,it plans to cut production to Qc units.What will happen to its average cost of production?
A)In the short run,its average cost falls from $47 to $41,and in the long run,average cost falls even further to $37. 
B)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $41. 
C)In the short run,its average cost falls from $47 to $37,and in the long run,average cost rises to $41. 
D)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $37.

Quizplus · Accepted Answer

The Answer of Figure 11-10 
-Refer to Figure 11-10.Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4.Now,following a permanent change in demand,it plans to cut production to Qc units.What will happen to its average cost of production?
A)In the short run,its average cost falls from $47 to $41,and in the long run,average cost falls even further to $37. 
B)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $41. 
C)In the short run,its average cost falls from $47 to $37,and in the long run,average cost rises to $41. 
D)In the short run,its average cost rises from $47 to $55,and in the long run,average cost falls to $37.

Figure 11-10 -Refer to Figure 11-10.Suppose for the Past 8 Years the 8