Magma Motor Company Is Producing at Minimum Efficient Scale When

Magma Motor Company is producing at minimum efficient scale when it produces 2,000 cars per month. What happens if it increases output to 2,100 per month?

A) Long-run average total cost decreases.
B) There is no change in long-run average total cost.
C) Marginal cost falls to zero.
D) The average total cost in the long run increases.

Correct Answer:

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