The following diagram shows the long-run average and marginal cost curves for a firm. It also shows the short-run marginal cost curve for two levels of fixed capital: K = 150 and K = 300. For each plant size, draw the corresponding short-run average cost curve and explain briefly why that curve should be where you drew it and how it is consistent with the other curves.

Transcribed Image Text:

60- SMC(Q) K 150 SMQQ). K 300 MCQ AC(O) : 30 20- 10 2 10