When a firm increases its plant size in the long run and its per-unit costs fall, this is called
A) diminishing returns and is shown by the downward-sloping portion of the MP curve (or the upward-sloping portion of the MC curve) .
B) constant returns to scale and is shown by the flat portion of the LRATC curve.
C) diseconomies of scale and is shown by the upward-sloping portion of the LRATC curve.
D) economies of scale and is shown by the downward-sloping portion of the LRATC curve.
Correct Answer:
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