8. A firm faces the following long-run total cost curve and is deciding what size factory...

 

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8. A firm faces the following long-run total cost curve and is deciding what size factory to build. Refer to the graph below to answer the following questions: Cost SRATC 1 SRATC 3 SRATC 2 SRATC 4 LRATC 200 450 700 1400 Output a. When this firm is deciding what size factory to build is it making a short-run or long-run decision? b. If it wants to produce 200 units, what short-run total cost curve is consistent with the factory it should choose? c. Does the firm face economies or diseconomies of scale between 200 & 700 units? d. What is the minimum efficient level of production facing this firm? 8. A firm faces the following long-run total cost curve and is deciding what size factory to build. Refer to the graph below to answer the following questions: Cost SRATC 1 SRATC 3 SRATC 2 SRATC 4 LRATC 200 450 700 1400 Output a. When this firm is deciding what size factory to build is it making a short-run or long-run decision? b. If it wants to produce 200 units, what short-run total cost curve is consistent with the factory it should choose? c. Does the firm face economies or diseconomies of scale between 200 & 700 units? d. What is the minimum efficient level of production facing this firm?