When a firm is experiencing constant returns to scale, it follows that
A)unit costs are rising.
B)average total cost is rising.
C)unit costs are constant.
D)average total cost is constant.
E)c and d

Question

Quizplus · Accepted Answer

Constant returns to scale imply that increasing the input by a certain percentage results in an increase in output by the same percentage, leading to constant unit costs and average total costs.

When a Firm Is Experiencing Constant Returns to Scale, It