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The Figure Given Below Shows Three Short Run Average Total

Question 100

Multiple Choice

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm. Figure 7.3 The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm. Figure 7.3 Refer to the Figure 7.3.In the long run, an increase in production from Q<sub>1 </sub>to Q<sub>3 </sub>would: A) increase average cost by C<sub>4 </sub>- C<sub>1</sub>. B) increase average cost by C<sub>3 </sub>- C<sub>1</sub>. C) increase average cost by C<sub>3 </sub>- C<sub>2</sub>. D) decrease average cost by C<sub>3 </sub>- C<sub>1</sub>. E) decrease average cost by C<sub>3 </sub>- C<sub>2</sub>. Refer to the Figure 7.3.In the long run, an increase in production from Q1 to Q3 would:


A) increase average cost by C4 - C1.
B) increase average cost by C3 - C1.
C) increase average cost by C3 - C2.
D) decrease average cost by C3 - C1.
E) decrease average cost by C3 - C2.

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