2. that a firm is uncertain about the future demand for its product and is considering...

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2. that a firm is uncertain about the future demand for its product and is considering four alternative plant sizes. The short-run average cost curves for the four plan sizes are given by SACI (small), SAC2 (medium), SAC3 (large), and SAC4 (extra-large). Illustrate your answer in a figure how can the firm choose the optimal plan size to build according to different output level. And then derive the long-run average cost curve of the firm. (20 points)

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