If long run average costs rise with output,you have
A)Increasing returns to scale
B)Decreasing returns to scale
C)Constant returns to scale
D)None of the above

Question

​If long run average costs rise with output,you have
A)​Increasing returns to scale
B)Decreasing returns to scale
C)Constant returns to scale
D)​None of the above

Quizplus · Accepted Answer

When long run average costs rise with output, it indicates diminishing returns to scale, the production process is becoming less efficient as output increases. This is because the cost of producing additional units of the output is increasing, leading to a higher average cost per unit. Therefore, option B, decreasing returns to scale, is the best answer.

​If Long Run Average Costs Rise with Output,you Have

If Long Run Average Costs Rise with Output,you Have