Constant returns to scale refers to when:

A. an increase in the quantity of output increases average total cost in the long run.
B. average total cost does not depend on the quantity of output in the long run.
C. an increase in the quantity of output decreases average total cost in the long run.
D. None of these is true.


Answer: B

Economics

You might also like to view...

Some college students have claimed that because their incomes will be higher as a result of attending college, there is no opportunity cost of attending college. Do you agree? Explain.

What will be an ideal response?

Economics

Core competency implies:

A) a firm produces one single product. B) a firm hires only one type of employee. C) a firm focuses on only one type of customer. D) a firm does one thing better than it does other things. E) a firm must be competent at its core - its executive level.

Economics

According to the permanent income hypothesis, when income rises above the permanent income level, the household saves at a lower rate than the long-run MPS

a. True b. False Indicate whether the statement is true or false

Economics

The Bretton Woods system:

A. committed the participating countries to a system of floating exchange rates. B. was set up as a result of the U.S. balance of payments crisis in the early 1970s. C. committed the participating countries to a system of fixed exchange rates. D. established the rules of the game of the gold standard.

Economics