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What does excess capacity, at capacity, and beyond capacity mean in terms of the minimum point...

What does excess capacity, at capacity, and beyond capacity mean in terms of the minimum point on the SATC?

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Answer #1

Point A in the above graph represents at capacity that is at the point where the ATC is the lowest, Point B is excess capacity i.e. at that point the firm in the market can produce more and reduce the price more, point C is the point were the firm is producing more than they should as the cost is increasing and they are not efficient i.e. beyond capacity.

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