Use the following to answer question:
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from A to B.
A)constant returns to scale
B)economies of scale
C)diseconomies of scale
D)constant total cost as output increases

Question

Use the following to answer question: 
-(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from A to B.
A)constant returns to scale 
B)economies of scale 
C)diseconomies of scale 
D)constant total cost as output increases

Quizplus · Accepted Answer

In the output region from A to B, the firm experiences constant returns to scale, meaning that as the firm increases its output, the long-run average cost remains constant.

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