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)long-run average total cost is constant.

Question

Quizplus · Accepted Answer

When a firm is experiencing constant returns to scale, it means that an increase in inputs leads to the same proportional increase in outputs, resulting in a constant long-run average total cost.

When a Firm Is Experiencing Constant Returns to Scale, It