The following figure shows the long-run average cost curve for a tire manufacturer and the long run average cost curve for a rubber producer. Which of the following can be concluded from the information provided in the figure given below?
Figure 14.1

A) The cost of producing rubber is much lower than the cost of producing tires.
B) The total cost of producing 100,000 tires is greater than the total cost of producing 200,000 tires.
C) The minimum efficient scale of producing rubber is 4 million pounds.
D) The minimum efficient scale of producing tires is greater than 200,000 tires.
E) The marginal cost of producing the 200,000th tire must exceed the average cost of 200,000 tires.
Correct Answer:
Verified
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