CostSRATC,واجThe crpés 1,2, and 3 for the SRATC on refer to different plant saresLRACSRATC,SRATC₂9aOA The fimm cannot produce at point C because there is no SRATC curve through this pointOB. The tem may choose to remain at point B until the price of its output increases enough to justify building a new plantOC. If the firm continues to produce at point B for any period of time & must be because it is not proft-maximizingOD. If this em continues to produce at point B for any period of time it must be because it is not cost-minimizingOE There can be a significant time delay while the fim readjusts to plant size, during which time remains at point B

The presence of a fixed input constrains is short-run average costs. So, in the long term, we can…

the SRATC can LRAC Q DA The fim cannot produce at pont C because there is no SRATC curve through this poet OB The im may choose to remain at pont Bunt the price of Oct continues to produce at point to a period of time 00 connues to produce a pont for any period of time OE There can be U SRATC, SRATC₂ SRATC₂ es output novases enough to unity building a new plant must be because net prot ang must be because not cost-meng ansat pont B

the SRATC can LRAC Q DA The fim cannot produce at pont C because there is no SRATC curve through this poet OB The im may choose to remain at pont Bunt the price of Oct continues to produce at point to a period of time 00 connues to produce a pont for any period of time OE There can be U SRATC, SRATC₂ SRATC₂ es output novases enough to unity building a new plant must be because net prot ang must be because not cost-meng ansat pont B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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