A firm has a total cost function of C(Q) = 75 + 25Q^1/2.The firm experiences A)economies of scale. B)diseconomies of scale. C)constant returns to scale. D)all of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

The total cost function includes a term of Q^1/2, which indicates that the firm has economies of scale. This is because as the level of output (Q) increases, the total cost per unit decreases, indicating that the firm benefits from producing a larger quantity of output. Therefore, the answer is A, economies of scale.

A Firm Has a Total Cost Function of C(Q) =