At the efficient scale of production, the long run ATC is Rs 20 and the output is Q. How much would a firm supply if the market price is Rs 10?

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Solution

The correct option is D
0

The efficient scale of production corresponds to the minimum of the LRAC curve. Hence, the minimum average total cost is Rs 20. Since P < LRAC, the firm's supply would be 0.

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At the efficient scale of production, the long run ATC is Rs 20 and the output is Q. How much would a firm supply if the market price is Rs 10?

The correct option is D 0 The efficient scale of production corresponds to the minimum of the LRAC curve. Hence, the minimum average total cost is Rs 20. Since P < LRAC, the firm's supply would be 0.

The correct option is D
0

The efficient scale of production corresponds to the minimum of the LRAC curve. Hence, the minimum average total cost is Rs 20. Since P < LRAC, the firm's supply would be 0.