Which of the following is guaranteed by increasing returns to scale in production experienced in the long run?
A)Negative marginal costs
B)Zero average costs
C)Declining average costs
D)Rising marginal costs

Question

Quizplus · Accepted Answer

Increasing returns to scale will lead to a reduction in average costs as output increases, implying economies of scale. Therefore, declining average costs are guaranteed by increasing returns to scale.

Which of the Following Is Guaranteed by Increasing Returns to Scale