Use the following graph to answer the following questions.

-If the firm expanded its scale of production and found that its average costs did not change,which of the curves would reflect this situation?

Question

Use the following graph to answer the following questions.
 
-If the firm expanded its scale of production and found that its average costs did not change,which of the curves would reflect this situation?

Quizplus · Accepted Answer

If a firm expands its scale of production and its average cost remains constant, it implies that the firm is experiencing constant returns to scale. In the given graph, the LRATC2 curve represents the long-run average total cost for a firm experiencing constant returns to scale. Therefore, the curve LRATC2 reflects this situation.

Use the Following Graph to Answer the Following Questions