Joshua owns a suit store.He currently sells around 10,000 suits per year.If he increases the size of his store so that he can display and sell even more suits,and his long-run average total cost remains unchanged,we know that Joshua is experiencing

Question

Quizplus · Accepted Answer

When a firm increases its output and its long-run average total cost remains unchanged, it is experiencing constant returns to scale. This means that the firm's output is increasing at the same rate as its input, leading to no change in the average cost of production per unit.

Joshua Owns a Suit Store