Asked by Apiwe Xozwa on Jun 13, 2024
Verified
Refer to Figure 13-2. Curve A intersects curve B
A) where the firm maximizes production.
B) at the minimum of average fixed cost.
C) at the efficient scale.
D) where fixed costs equal variable costs.
Efficient Scale
The level of production that minimizes long-term average total costs, resulting from economies of scale without incurring diseconomies of scale.
- Assess the interrelation between marginal cost, average total cost, and the scale of efficiency in production processes.
- Analyze the multiplicity of cost curve shapes and their implications in the domain of production and cost evaluation.
Verified Answer
NS
Nestor SanchezJun 14, 2024
Final Answer :
C
Explanation :
Curve A, which typically represents the long-run average cost curve, intersects curve B, the short-run average cost curve, at the efficient scale. This is the point where the firm is producing at its lowest average cost in the long run.
Learning Objectives
- Assess the interrelation between marginal cost, average total cost, and the scale of efficiency in production processes.
- Analyze the multiplicity of cost curve shapes and their implications in the domain of production and cost evaluation.