The ABC Corporation decreases all of its inputs by 18 percent and finds that its output falls by 18 percent. This means that initially it was producing

A) in the range of constant returns to scale.
B) in the range of economies of scale.
C) where AP is less than MP.
D) in the range of diseconomies of scale.

Economies of Scale

Cost advantages that a business obtains due to expansion, leading to a reduction in the average cost per unit through increased production.

Diseconomies of Scale

The situation in which a business grows to a point where the costs per unit increase, opposed to saving costs, often due to managerial inefficiencies or complexity.

Constant Returns to Scale

A situation in which increasing the amount of all inputs used in production by a certain factor results in output increasing by the same factor.