21. The long-run average cost curve for an industry is represented in the following graph. Add short-run average cost curves and short-run marginal cost curves for three firms in this industry, with one firm producing an output of 10,000 units, one firm producing an out put of 20,000, and one firm producing an out- put of 30,000. Label these as Scale 1, Scale 2, and Scale 3, respec- tively. What is likely to happen to the scale of each of these three firms in the long run? Cost per| unit ($) LRAC 10,000 20,000 30,000 Units of output
21. The long-run average cost curve for an industry is represented in the following graph. Add short-run average cost curves and short-run marginal cost curves for three firms in this industry, with one firm producing an output of 10,000 units, one firm producing an out put of 20,000, and one firm producing an out- put of 30,000. Label these as Scale 1, Scale 2, and Scale 3, respec- tively. What is likely to happen to the scale of each of these three firms in the long run? Cost per| unit ($) LRAC 10,000 20,000 30,000 Units of output
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 21P
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