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Suppose that a firm's long-run average total costs of producing hand-crafted chairs is $300 when it produces 10,000 chairs and $325 when it produces 11,000 chairs. For this range of output, the firm is likely experiencing

User Micah Henning
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1 Answer

21 votes
21 votes

Answer:

Coordination Problem

Step-by-step explanation:

Below is the given values:

Average total cost of producing 10000 chairs = $300

Average total cost of producing 11000 chairs = $325

The coordination problem arises when an increase in total output increases the average total cost due to the non-coordination of the inputs used in the production process. Therefore coordination is correct answer.

User Ymz
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