Figure 11-11 Illustrates the Long-Run Average Cost Curve for a Firm

Figure 11-11 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCa,ATCb and ATCc.
-Refer to Figure 11-11.In the short run,if the firm sells fewer than 5,000 picture frames per month

A) it should produce with the scale of operation associated with ATCa.
B) it should produce with the scale of operation associated with ATCb.
C) it should produce with the scale of operation associated with ATCc.
D) it will experience constant returns to scale.

Correct Answer:

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