The table below shows average cost data for three different-sized plants-1, 2, and 3-which are the only three sizes possible. Output Plant 1 Plant 2 Plant 3 100 $15 $16 $21 200 14 13 18 300 13 14 400 500 14 12 11 15 16 12 a. In what plant size is MES achieved? Plant 2 b. What is the economic capacity for plant 1? Economic capacity:
The table below shows average cost data for three different-sized plants-1, 2, and 3-which are the only three sizes possible. Output Plant 1 Plant 2 Plant 3 100 $15 $16 $21 200 14 13 18 300 13 14 400 500 14 12 11 15 16 12 a. In what plant size is MES achieved? Plant 2 b. What is the economic capacity for plant 1? Economic capacity:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please provide solution for Part B
Transcribed Image Text:The table below shows average cost data for three different-sized plants-1, 2, and 3-which are the only three sizes possible.
Output
Plant 1
Plant 2
Plant 3
100
$15
$16
$21
200
14
13
18
300
13
14
400
14
12
11
500
15
16
12
a. In what plant size is MES achieved?
Pant 2
b. What is the economic capacity for plant 1?
Economic capacity:
c. What is the right-size plant to produce an output of 200?
Plant 2
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