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The figure to the right illustrates the long-run average cost curve for a company that makes motors. 48.00- Suppose the company produces 12 thousand motors

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The figure to the right illustrates the long-run average cost curve for a company that makes motors. 48.00- Suppose the company produces 12 thousand motors per month. Is it experiencing economies of scale, diseconomies of Long = run average cost 44.00- scale, or constant returns to scale? 40.00- If the company produces 12 thousand motors, then it experiences 36.00- 32.00- 28.00- Average total cost 24.00 20.00- 16.00- 12.00- 8.00- 4.00- 0.00- 0 8 10 12 14 16 18 20 Quantity (motors per month in 1,000s)

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