Order the answer to: Consider the following diagram of…
|Question||a. The SRATC curve is drawn for a given plant size. Given this plant size, what is the level of output that minimizes short-run average costs? What are unit costs in the short run at this level of output?
b. What is the level of output for which this plant size is optimal in the long run? What are unit costs in the short run at this level of output?
c. Explain the economics of why c1 is greater than C4.
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