Refer to the graph above to answer this question.  All of the...

Refer to the graph above to answer this question. All of the following statements except one are correct. Which is the exception?

Select one:

A.Increasing returns to scale are experienced when output is increased from Q₁ to Q₄.

B.Plant 2 achieves minimum efficient scale.

C.Output level Q₃ can be produced for the same cost in plant 1 and in plant 2.

D.Output level Q₃ is economic capacity for plant size 1.

E.Plant 1 has excess capacity at output level Q₁.

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Refer to the graph above to answer this question. All of the following statements except one are correct. Which is the exception?

Select one:

A.The long-run average cost curve illustrates both increasing and constant returns to scale.

B.Constant returns to scale exist between outputs Q₄ and Q₅.

C.AC₁, AC₂ and AC₃ are long-run average cost curves.

D.Both the short-run and the long run-costs are illustrated in this graph.

E.An increase in output from Q₁ to Q₃ could occur in plant 1.

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Refer to the graph above to answer this question. Between what output levels do increasing returns to scale exist?

Select one:

A.Q₁ and Q₅.

B.Q₁ and Q₃ only.

C.Q₁ and Q₂ only.

D.Q₁ and Q₄.

E.Q₄ and Q₅.

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Refer to the graph above to answer this question. Between what output levels do constant returns to scale exist?

Select one:

A.Q₁ and Q₄.

B.Q₁ and Q₃.

C.Q₄ and Q₅.

D.Q₁ and Q₅.

E.Q₁ and Q₂.

Refer to the graph above to answer this question. Can/should this firm produce an output of 200 at an average total cost of $40?

Select one:

A.No, this combination would be unobtainable because production is inefficient.

B.No, this combination is unobtainable given present resource prices and the current state of technology.

C.Yes, and that output would be economic capacity.

D.Yes, but production would be inefficient.

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Refer to the graph above to answer this question. Can/shouldt his firm produce an output of 200 at an average total cost of $30?

Select one:

A.Yes, and that output would be economic capacity.

B.Yes, but production would be inefficient.

C.Yes, and the firm is experiencing economies of scale.

D.No, this combination is unobtainable because production would be inefficient.

E.No, this combination is unobtainable given present resource prices and the current state of technology.

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Refer to the graph above to answer this question. Can/shouldthis firm produce an output of 200 at an average total cost of $20?

** hint - READ carefully and think about the LRAC concept and how it is created! 
 

Select one:

A.Yes, and that output is economic capacity.

B.Yes, but production would be inefficient.

C.No, this combination is unobtainable because production would be inefficient.

D.No, this combination would be unobtainable given present resource prices and the current state of technology.