11. Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in the accompanying figure. What plant size will the firm choose in producing

(a) 50,

(b) 130,

(c) 160, and

(d) 250 units of output? Draw the firm’s long-run average-cost curve on the diagram and describe this curve. LO5

Transcribed Image Text:

Total Total Total Total Average Average Product Fixed Cost Varlable Cost Cost Fixed Cost Varlable Cost 0 $ 0 1 45 2 85 3 120 4 150 01 5 185 6 225 7 270 8 325 9 390 10 465 Average Total Cost Marginal Cost