Use the following table to answer the next question. Output ATC Plant 1 ATC Plan
ID: 1117439 • Letter: U
Question
Use the following table to answer the next question.
Output
ATC Plant 1
ATC Plant 2
ATC Plant 3
ATC Plant 4
1,500
$10
$15
$20
$30
2,000
8
12
17
25
2,500
9
10
15
20
3,000
12
8
13
18
3,500
15
6
11
16
4,000
18
10
9
14
4,500
20
12
7
12
5,000
24
15
11
10
5,500
29
19
13
8
6,000
35
25
15
9
Plant sizes get larger as you move from Plant 1 to Plant 4.
In the long run, the firm should use Plant 3’s size for what level of output?
Multiple Choice
Less than 3,000 units
3,000 to 3,500 units
4,000 to 4,500 units
5,000 to 5,500 units
Output
ATC Plant 1
ATC Plant 2
ATC Plant 3
ATC Plant 4
1,500
$10
$15
$20
$30
2,000
8
12
17
25
2,500
9
10
15
20
3,000
12
8
13
18
3,500
15
6
11
16
4,000
18
10
9
14
4,500
20
12
7
12
5,000
24
15
11
10
5,500
29
19
13
8
6,000
35
25
15
9
Explanation / Answer
ATC is minimum when firm is producing 4500 units and started increasing after that. The firm should use plant 3's size for 4000 to 4500 units of output.
OPTION C
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