Refer to the information provided in Figure 13.2 below to answer the question that follows. Figure 13.2
-Refer to Figure 13.2. Each electricity producer has the given LRAC curve. The total cost of producing 100,000 kilowatts per hour is minimized with ________ firm(s) in the industry.

Question

Refer to the information provided in Figure 13.2 below to answer the question that follows.  Figure 13.2
-Refer to Figure 13.2. Each electricity producer has the given LRAC curve. The total cost of producing 100,000 kilowatts per hour is minimized with ________ firm(s) in the industry.

Quizplus · Accepted Answer

Looking at the LRAC curve for each electricity producer, we can see that the lowest point on the curve is for the producer with the flattest curve. This indicates that this producer has the lowest LRAC for any given output level. Therefore, in order to minimize the total cost of producing 100,000 kilowatts per hour, the industry should be served by only one firm - the one with the flattest LRAC curve.

Refer to the Information Provided in Figure 13