Assume that with 20L and 30K a given firm can produce 100 units of output and with 40L and 60K it can produce 175 units (where L and K denote the labor and capital inputs) .Based on this information,we can conclude that:
A) decreasing returns to scale exist.
B) average cost is decreasing.
C) average cost is constant.
D) increasing returns to scale exist.
Correct Answer:
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