The following graph shows the short-run average total cost curves and the long-run average cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average cost curve (LRAC); for example, Q1? marks the point of tangency between SRATC C1? and LR

Question

In the long run, if the firm decides to keep output at its initial level, what will it likely do?
Shift to operate on SRATC S

The following graph shows the short-run average total cost curves and the long-run average cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average cost curve (LRAC); for example,

Q_{1}

marks the point of tangency between SRATC

C_{1}

and LRAC. The orange point on SRATC, indicates the firm's current output level in the short run

(Q_{4})

. In the long run, if the firm decides to keep output at its initial level, what will it likely do? Shift to operate on SRATC SR

_{2}

. Shift to operate on

SR A T C_{4}

Stay on

SR A T C_{3}

but decrease to the point touching

L R A C

Shut down Over which range of output levels do you find diseconomies of scale? 0 to

Q_{1}

Q_{2}

to

Q_{4}

Greater than

Q_{3}

0 to

Q_{3}

0 to

Q_{5}

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