24. Refer to the above graphs. They show the long-run average total cost (LRATC)

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24. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph are there economies of scale throughout the entire range of output of cars? Graph A Graph B Graph C Graph D
24. 24. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph are there economies of scale throughout the entire range of output of cars? Graph A Graph B Graph C Graph D
Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph are there economies of scale throughout the entire range of output of cars? Graph A Graph B Graph C Graph D
Graph A Graph B Graph C Graph D
25. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale? Graph A Graph B Graph C Graph D
25. 25. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale? Graph A Graph B Graph C Graph D
Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale? Graph A Graph B Graph C Graph D
Graph A Graph B Graph C Graph D
26. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. Just after World War II the Ford Motor Company opened a large automobile manufacturing facility near Detroit with capacity Q0 autos per year. Shortly thereafter, the plant was closed and two smaller ones were opened in the same vicinity, each more profitably producing about one-half as many cars as the old facility. Which graph best shows the situation described above, when only one plant was operating? Graph A Graph B Graph C Graph D

26. 26. Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. Just after World War II the Ford Motor Company opened a large automobile manufacturing facility near Detroit with capacity Q0 autos per year. Shortly thereafter, the plant was closed and two smaller ones were opened in the same vicinity, each more profitably producing about one-half as many cars as the old facility. Which graph best shows the situation described above, when only one plant was operating? Graph A Graph B Graph C Graph D

Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. Just after World War II the Ford Motor Company opened a large automobile manufacturing facility near Detroit with capacity Q0 autos per year. Shortly thereafter, the plant was closed and two smaller ones were opened in the same vicinity, each more profitably producing about one-half as many cars as the old facility. Which graph best shows the situation described above, when only one plant was operating? Graph A Graph B Graph C Graph D

Graph A Graph B Graph C Graph D

Graph A Graph B Graph C Graph D Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph are there economies of scale throughout the entire range of output of cars? Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. For which graph is the output level Q0 at minimum efficient scale? Refer to the above graphs. They show the long-run average total cost (LRATC) for cars. Just after World War II the Ford Motor Company opened a large automobile manufacturing facility near Detroit with capacity Q0 autos per year. Shortly thereafter, the plant was closed and two smaller ones were opened in the same vicinity, each more profitably producing about one-half as many cars as the old facility. Which graph best shows the situation described above, when only one plant was operating?

Explanation / Answer

24.

Graph B

(Because costs are falling as scale of operations increases)

25.

Graph A

(Because Q0 is produced at the minimum point of LRAC)

26.

Graph C

(Because the firm is still under increasing returns to scale and thus making good profits)

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