When returns to scale are constant, long run marginal cost is:
A)horizontal.
B)greater than long run average cost.
C)less than long run average cost.
D)equal to long run average cost.

Question

Quizplus · Accepted Answer

When returns to scale are constant, long run marginal cost is equal to long run average cost. This means that the cost of producing one more unit is the same as the average cost of producing all units. Therefore, the answer is D, equal to long run average cost.

When Returns to Scale Are Constant, Long Run Marginal Cost