Asked by
Samantha Blair
on Dec 11, 2024
Verified
The long-run average total cost (LRATC) curve
A) indicates the per-unit cost of producing various rates of output with a specific size of plant but variable levels of labor and technology.
B) indicates the minimum per-unit cost that can be achieved at various output rates when the firm is free to choose among plant sizes.
C) will be falling when diseconomies of scale are present and rising when economies of scale are present.
D) is a U-shaped curve.
E) is both a and d above.
Long-run Average Total Cost
The average cost per unit of output over the long term, where all inputs are considered variable, allowing firms to adjust all factors of production.
Plant Sizes
The physical capacity or scale of a manufacturing facility, which can influence production volume, efficiency, and cost.
Per-unit Cost
The cost associated with producing or acquiring one unit of a product.
- Elucidate how economies and diseconomies of scale influence the cost structures of firms.
Verified Answer
CB
Learning Objectives
- Elucidate how economies and diseconomies of scale influence the cost structures of firms.