A single-plant fim trying to select the rate of output consistent with an overal

Question

A single-plant fim trying to select the rate of output consistent with an overall plant size that yields the minimum efficient scale will choose a rate of output for which O A. the long-run marginal cost curve crosses the long-run average fixed cost curve at that rate of output. ( B. total fixed cots are minimized at that rate of output. O C. the short-run marginal cost curve crosses the short-run average total cost curve at that rate of output. OD. long-run average total cost is lowest at that rate of output

Explanation / Answer

D. long-run average total cost is lowest at that rate of output.

(Minimum efficient scale occurs in the long run at that level of output at which total long run average cost is at its minimum. So, a single plant firm trying to select the rate of output consistent with minimum efficient scale will produce at the point where long run average total cost is lowest at that rate of output)

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