Use the following table to answer the next question. Output ATC-1 ATC-2 ATC-3 AT
ID: 1117438 • Letter: U
Question
Use the following table to answer the next question.
Output
ATC-1
ATC-2
ATC-3
ATC-4
1,500
$10
$15
$20
$30
2,000
9
12
17
25
2,500
8
10
15
20
3,000
12
7
13
18
3,500
15
6
11
16
4,000
18
10
7
14
4,500
20
12
8
12
5,000
24
15
11
9
5,500
29
19
13
12
6,000
35
25
15
14
Plant sizes get larger as you move from ATC-1 to ATC-4.
At what level of output are economies of scale exhausted by this firm?
Multiple Choice
2,500 units
3,500 units
4,000 units
5,500 units
Output
ATC-1
ATC-2
ATC-3
ATC-4
1,500
$10
$15
$20
$30
2,000
9
12
17
25
2,500
8
10
15
20
3,000
12
7
13
18
3,500
15
6
11
16
4,000
18
10
7
14
4,500
20
12
8
12
5,000
24
15
11
9
5,500
29
19
13
12
6,000
35
25
15
14
Explanation / Answer
Answer
3500 units
the economics of scale is up where the cost is decreasing it decreases up to $6 after that it increases so the economics of scale is exhausted at 3500 units of output
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