Use Figure 9.16 to answer the following questions.a. If the firm produces 5,000 units of output with a plant using 10 units of capital, the average cost is $_________ and total cost is $ _________.b. If the firm produces 5,000 units of output with a plant using 30 units of capital, the average cost is $_________ and total cost is $ _________.c. In the long-run planning horizon, which plant should the manager choose to produce 5,000 units of output? Why?

Figure 9.16

Transcribed Image Text:

ATCR-60 LAC 0.80 0.75 ATCR-10 ATCR-30 0.72 0.50 0.30 2,000| 3,000 4,000 5,000 7,500 10,000 12,000 Output Average cost (dollars)