The following graph shows the short-run average total cost curves for different plant sizes and the long-run average total cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost (ATC) curve and the long-run average total cost (LRATC) curve; for example, Q1 marks the point of tangency between ATC, and LRATC. The orange point on ATC, indicates the firm's current output level in the short run (Q4). ATC, ATC LRATC ATC, ATC, ATC, OUTPUT In the long run, if the firm decides to keep output at its initial level, what will it likely do? O Shut down O Stay on ATC, but decrease to the point touching LRATC O Shift to operate on ATC O Shift to operate on ATC2 COST PER UNIT
The following graph shows the short-run average total cost curves for different plant sizes and the long-run average total cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost (ATC) curve and the long-run average total cost (LRATC) curve; for example, Q1 marks the point of tangency between ATC, and LRATC. The orange point on ATC, indicates the firm's current output level in the short run (Q4). ATC, ATC LRATC ATC, ATC, ATC, OUTPUT In the long run, if the firm decides to keep output at its initial level, what will it likely do? O Shut down O Stay on ATC, but decrease to the point touching LRATC O Shift to operate on ATC O Shift to operate on ATC2 COST PER UNIT
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQ
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please answer both of the questions
thank you! =)
Transcribed Image Text:The following graph shows the short-run average total cost curves for different plant sizes and the long-run average total cost curve for a publishing
firm. The five marked quantities indicate points of tangency between each short-run average total cost (ATC) curve and the long-run average total
cost (LRATC) curve; for example, Q1 marks the point of tangency between ATC, and LRATC.
The orange point on ATC3 indicates the firm's current output level in the short run (Q.).
ATC,
ATC
LRATC
ATC
ATC,
ATC,
OUTPUT
In the long run, if the firm decides to keep output at its initial level, what will it likely do?
O Shut down
O Stay on ATC3 but decrease to the point touching LRATC
O Shift to operate on ATC4
O Shift to operate on ATC2
COST PER UNIT
Transcribed Image Text:LRATO
ATC
ATC,
ATC,
OUTPUT
In the long run, if the firm decides to keep output at its initial level, what will it likely do?
O Shut down
O Stay on ATC3 but decrease to the point touching LRATC
O Shift to operate on ATC4
O Shift to operate on ATC2
At which output level (or range of output levels) can the firm produce most efficiently, given its current productive capacity?
O Q3
O Q2 to Q4
O Q4
O Q2
O o to Q3
COST PER UNIT
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