Constant returns to scale exist when long-run average costs
A)increase as output is increased.
B)decrease as output is increased.
C)remain constant as output is increased.
D)none of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Constant returns to scale occur when a proportional increase in all inputs results in an equivalent increase in output, causing long-run average costs to remain constant as output is increased. Therefore, option C is correct.

Constant Returns to Scale Exist When Long-Run Average Costs