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average cost curve

In problem 4, Sue's surfboard buys a second plant and the total quantity of each quantity of labor increases by 50%. The total fixed cost of operating each plant is $200.00 a week. The wage rate is $100.00 a week.

a. Set out the average total cost curve when Sue's surfboards operates two plants.
b. Draw the long-run average cost curve.
c. Over what output ranges is it efficient to operate one plant?



Solution Summary

The average cost curve is depicted.