Asked by Lamide Sodunke on Sep 24, 2024
You would expect that your firm is experiencing increasing returns to scale if
A) Long run average costs increase with output
B) Long run average costs decrease with output
C) Long run average costs are constant with respect to output
D) None of the above
Long Run
A period of time sufficient for all adjustments to be made in an economy or market, considering all possible changes in production.
Average Costs
The total cost of production divided by the number of units produced, used to determine the average expense per unit.
- Assess how returns to scale affect long-run average costs.
Learning Objectives
- Assess how returns to scale affect long-run average costs.
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