7 Consider the diagram at the right of SRATC and LRAC curves. The SRATC curveis drawn for a given plant size.a. Given a plant size associated with SRATC, the level of output that minimizesshort-run average costs is Q₁ Unit costs in the short run at this level of outputare C₁b. Given a plant size associated with SRATC, the level of output that is optimal inthe long run is Q Unit costs in the short run at this level of output are coc. Explain the economics of why c, is greater than c4c, is associated with the long run while ca is associated with the long runThe point that has a unit cost of c corresponds to a curve that is associated withmore labourscale.where the firm can take advantage ofCost per Unit ($)€3COC1Qo Q₁0₂SRATCLRACOutout

The short run is an idea that expresses that, inside a specific period later on, no less than one…

diagram at the right of SRATC and LRAC curves. The SRATC curve s drawn for a given plant size. a Given a plant size associated with SRATC, the level of output that minimizes short-run average costs is Q₁ Unit costs in the short run at this level of output are c₁ Given a plant size associated with SRATC, the level of output that is optimal in the long run is Qo Unit costs in the short run at this level of output are co = Explain the economics of why c, is greater than c 2, is associated with the long nin Cost per Unit ($) co SRATC