Question

QUESTION 3 Following are the short-run average-total-cost schedules for three plants of different sizes that a firm might build to produce its product. Assume that these are the only possible sizes of plants that the firm might build. Long-Run Schedule Output ATC 10 Plant Size A Output ATC 10 $7 20 6 30 5 40 4 Plant Size B Output ATC 10 $17 20 30 9 40 6 Plant Size C Output ATC 10 $53 20 30 35 40 27 3 4 5 60 70 80 90 100 110 7 10 14 19 25 32 40 60 70 80 907 100 110 120 90 100 101 110 110 120 120 25 120 1 | a. Complete the long-run average-cost schedule for the firm in the following table. b. For outputs between and the firm should build Plant A. _, the firm should build Plant B. and _, the firm should build Plant C. and _

Answer 1

Long Run ATC is the minimum ATC from the given three short run ATC

Long Run Schedule	ATC
10	7
20	6
30	5
40	4
50	4
60	3
70	4
80	5
90	6
100	5
110	7
120	1

For output between, 10 and 40, the firm should build plant A

For output between, 50 and 80, the firm should build plant B

For output between, 90 and 120, the firm should build plant C