The long-run average cost of producing 19 units of output is $56, and the long-run average cost of producing 20 units is also $56. These numbers illustrate:
A) decreasing marginal productivity.
B) constant returns to scale.
C) economies of scale.
D) diseconomies of scale.

Question

Quizplus · Accepted Answer

The long-run average cost remains the same when output increases from 19 to 20 units, indicating constant returns to scale, where increasing production does not change the average cost.

The Long-Run Average Cost of Producing 19 Units of Output