Question

question 10 (0.1 points)dustins copy shop can use four alternative plants. the figure above shows the average total cost curves for plant 1 (atc1), plant 2 (atc2), plant 3 (atc3), and plant 4 (atc4). what is dustins long - run average cost if the output is 3,000 copies per day?5.0 cents per copy3.7 cents per copymore information is needed to determine the long - run average cost.8.5 cents per copy

Explanation:

Step1: Understand long - run average cost

In the long - run, the firm chooses the plant (average total cost curve) that minimizes the average total cost for a given level of output.

Step2: Locate the output level on the graph

The output is \(3000\) copies per day (i.e., \(3\) on the quantity axis, since quantity is in thousands).

Step3: Find the minimum average total cost at that output

Looking at the \(ATC_1\) and \(ATC_2\) curves, at \(Q = 3\) (thousand copies), the lowest point on the relevant part of the average total cost curves (the long - run average cost is the envelope of the short - run average total cost curves) corresponds to \(3.7\) cents per copy.

Answer:

3.7 cents per copy