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1)A firm is producing at the minimum average total cost with its current plant

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1)A firm is producing at the minimum average total cost with its current plant.

Draw the firm's long-run average cost curve. Label it.

Draw a point on the LRAC curve at which the firm can lower its average total cost by increasing its plant.

Draw the firm's short-run average total cost curve that is consistent with the point you have drawn. Label it.

When the firm can lower its average total cost by increasing its' plant, then it is operating at a point on its' long-run average cost curve with _____.

A. constant returns to scale

B. diseconomies of scale

C. economies of scale