Suppose your firm is in a range of production where it is experiencing increasing returns to scale.Knowing this,we can predict that:
A)the long-run average cost curve is upward-sloping
B)the firm operates within a primary industry
C)the method of production used is characterized by the repetition of exactly the same tasks
D)production techniques may include the use of assembly lines
E)the long-run average cost curve is horizontal

Question

Quizplus · Accepted Answer

Increasing returns to scale imply that as a firm increases all inputs, output increases by a larger proportion, often due to efficiencies such as those gained through assembly lines, which allow for specialization and efficiency in production. This does not necessarily relate to the shape of the long-run average cost curve, the industry type, or the repetition of tasks in a way that would exclusively define increasing returns to scale.

Suppose Your Firm Is in a Range of Production Where