d. What plant size would the firm need in order to achieve minimum efficient scale (MES)? e. At what output level does the firm achieve MES? Output: f. If R2D2 is producing an output of 10 in plant 3, does excess capacity exist? g. What would be the economic capacity for plant 2? Output: h. Given the LRAC curve in the above graph, at what output levels are there economies of scale? Outputs up to i. Given the LRAC curve in the above graph, between what output levels are constant returns to scale present? Outputs between and j. Given the LRAC curve in the above graph, above what output levels do diseconomies of scale exist? Output above The table below contains short-run cost data for five different plant sizes of the R2D2 Robotics Company.Plant 2Plant 3Plant 4Plant 5(Average (AverageCost in $) Cost in $)2.10//1.951.501.201.051.201.501.95///Output24681012141618202224Plant 1(AverageCost in $)1.501.351.501.802.25//////1.651.351.201.351.652.10/////(AverageCost in $)////1.801.201.051.141.261.501.80(AverageCost in $)//////1.801.351.201.351.651.95a. On the graph below, sketch in the five short-run cost curves (you do not have to plot each point) placing the lowest point of eachcurve in the correct position. Use the tools provided to plot the lowest point for each short-run curve of the five plants. b. Select the best size of plant when output is:Output4681012141618202224Plant(Click to select)(Click to select) ✓(Click to select)(Click to select) ✓(Click to select) ✓(Click to select)(Click to select) ✓(Click to select) V(Click to select)(Click to select) ✓(Click to select) ✓c. Graph the long-run average cost curve. Use the "LRAS" tool to plot the lowest point for each short-run curve of the five plants.i

The long run average cost is a function of output and it tells the minimum average cost required to…

Answered: d. What plant size would the firm need…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 7TY

See similar textbooks

Related questions

Question

100%

d. What plant size would the firm need in order to achieve minimum efficient scale (MES)?

e. At what output level does the firm achieve MES?

     Output:

f. If R2D2 is producing an output of 10 in plant 3, does excess capacity exist?


g. What would be the economic capacity for plant 2?

    Output:

h. Given the LRAC curve in the above graph, at what output levels are there economies of scale?

    Outputs up to

i. Given the LRAC curve in the above graph, between what output levels are constant returns to scale present?

    Outputs between  and

j. Given the LRAC curve in the above graph, above what output levels do diseconomies of scale exist?

   Output above

The table below contains short-run cost data for five different plant sizes of the R2D2 Robotics Company.
Plant 2
Plant 3
Plant 4
Plant 5
(Average (Average
Cost in $) Cost in $)
2.10
/
/
1.95
1.50
1.20
1.05
1.20
1.50
1.95
/
/
/
Output
2
4
6
8
10
12
14
16
18
20
22
24
Plant 1
(Average
Cost in $)
1.50
1.35
1.50
1.80
2.25
/
/
/
/
/
/
1.65
1.35
1.20
1.35
1.65
2.10
/
/
/
/
/
(Average
Cost in $)
/
/
/
/
1.80
1.20
1.05
1.14
1.26
1.50
1.80
(Average
Cost in $)
/
/
/
/
/
/
1.80
1.35
1.20
1.35
1.65
1.95
a. On the graph below, sketch in the five short-run cost curves (you do not have to plot each point) placing the lowest point of each
curve in the correct position. Use the tools provided to plot the lowest point for each short-run curve of the five plants.

b. Select the best size of plant when output is:
Output
4
6
8
10
12
14
16
18
20
22
24
Plant
(Click to select)
(Click to select) ✓
(Click to select)
(Click to select) ✓
(Click to select) ✓
(Click to select)
(Click to select) ✓
(Click to select) V
(Click to select)
(Click to select) ✓
(Click to select) ✓
c. Graph the long-run average cost curve. Use the "LRAS" tool to plot the lowest point for each short-run curve of the five plants.
i

Expert Solution

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Recommended textbooks for you

Microeconomics: Principles & Policy

Economics

ISBN:

9781337794992

Author:

William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:

Cengage Learning