Ch. 22 - the competitive firm

Refer to figure 21.5. Economies of scale occur in the following range of factory sizes

#1 through #3

In Figure 21.4, the long-run average total cost curve is given by the curved line segment

ABFDGE.

The marginal cost curve intersects the minimum of which of the following cost curves?

ATC.

In Figure 21.4, a firm that produces over 800 units of output should choose a plant with which short-run average total cost function?

ATC3 only.

Refer to figure 21.5. Diseconomies of scale begun to occur

After the third factory

Which of the following is always downward-sloping?

The average total cost curve when it is above the marginal cost curve

Marginal cost is equal to

The change in total costs divided by the change in quantity produced

The average variable cost curve slopes upward with a higher rate of output in the short run because of

The effect of diminishing returns.

Average total cost is equal to

Total cost divided by quantity produced

The long-run average total cost curve is constructed from the

lowest average total cost for producing each level of output.