Consider the short-run and long-run cost curves for a firm. If ...

[allywil32]

Question 1

Underutilization is justified if there are gains from building bigger plants. One such reason is if
◦ the firm passed its minimum efficient scale.
◦ the SRATC is below LRAC.
◦ LRAC curve is flat.
◦ LRAC is increasing.
◦ LRAC is declining.

Question 2

Consider the short-run and long-run cost curves for a firm. If there is an improvement in the firm's technology,
◦ both the long-run and short-run average cost curves will shift downward.
◦ the firm will move to a lower point on both its long-run and short-run average cost curves.
◦ the firm will move to a lower point on its long-run average cost curve only.
◦ there will be a downward shift in the long-run average cost curve but not in the short-run average cost curve.
◦ there will be no change in the cost curves in the long run.

[viper01]

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[allywil32]

Thanks for the timely response, appreciate it

[sultana.d]

Excellent