Timothy owns a landscaping company.If he increases the size of his company and experiences constant returns to scale as a result,his long-run average total cost curve should be

Question

Quizplus · Accepted Answer

Constant returns to scale mean that increasing the size of the company results in a proportional increase in output without a change in long-run average total cost. This implies that the long-run average total cost curve is horizontal, indicating that the company can produce any level of output at the same average cost.

Timothy Owns a Landscaping Company