Suits Me Fine is a clothing manufacturer in Queens, NY. Currently, it manufactur

Question

Suits Me Fine is a clothing manufacturer in Queens, NY. Currently, it manufactures 50 dress shirts per day in a medium-sized factory.

The following diagram shows the firm's short-run and long-run average total cost curves. In particular, the red curve represents Suits Me Fine's average total cost in the long run, and the three green curves show its average total cost curves in the short run for three different sizes of factory: small, medium, and large.

The lowest-cost way for Suits Me Fine to produce 50 shirts per day is to have a _____ factory.

a) medium

b) small

c) large

Explanation / Answer

medium.

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