Asked by Genelyn Silva on May 06, 2024
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(Figure: Long-Run Average Cost) Use Figure: Long-Run Average Cost.This firm has _____ in the output region from 0 to A.
A) decreasing returns to scale
B) constant returns to scale
C) increasing returns to scale
D) negative costs of production
Returns to Scale
The change in output resulting from a proportional change in all inputs used in the production process.
Long-Run Average Cost
is the average cost per unit of output achieved when all factors of production, including capital, are variable, often represented by a curve showing economies of scale.
Production Costs
The expenses incurred in the process of creating a product or service, including materials, labor, and overhead.
- Apprehend the ideas related to economies of scale, constant returns to scale, and diseconomies of scale.
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Learning Objectives
- Apprehend the ideas related to economies of scale, constant returns to scale, and diseconomies of scale.
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