Question

Refer to Exhibit 7.4, which shows short-run average cost curves. Average cost is lowest for a medium plant when output is _____

Answer 1

Answer: c) between Qa and Qb

Step-by-step explanation:

From the exhibit, the lowest cost will be recorded when output is between Qa and Qb because these points represent the lowest costs per unit for Curves A and C and the lowest points where output can be produced. Output being produced at costs lower than this is therefore the lowest for the medium plant.