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How does one draw a long run average cost curve using the set of data in the second question in the attached image?

In order to draw a long run average cost curve (LRAC), you have to know what information is needed. As you can see in the link below, the vertical axis of an LRAC shows the cost of making a given product. The horizontal axis of the graph shows the amount of the product that is produced.  What this means is that an LRAC shows how much it will cost (in terms of average cost per unit) to produce various quantities of a product.


If you look at the table in the image you have attached, you will see that you have the information you need.  The table gives you a lot of extraneous information that you do not need to draw your LRAC.  As mentioned above, all you need to know is the average costs per unit for each quantity produced. This information is in the bottom two rows of the table.  The table tells you, for example, that it costs .065 per kilowatt-hour to generate 5 million kilowatt-hours.  This gives you an ordered pair that you can graph because .065 is your cost (y value) and 5 million is your quantity (x value).  Plot the three points that you are given, then draw a curve that fits all three points.  The curve is your LRAC.

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