When we double the size of a firm,which of the following matches the concept of constant returns to scale?
A) Total costs remain the same.
B) Total fixed costs remain the same.
C) Total variable costs remain the same.
D) Per-unit variable costs remain the same.
E) Per-unit fixed costs remain the same.

Question

Quizplus · Accepted Answer

Constant returns to scale means that when input is doubled, output also doubles while keeping the per-unit costs constant. Therefore, per-unit variable costs remain the same as the size of the firm doubles.

When We Double the Size of a Firm,which of the Following