-Refer to the above figure. Constant returns to scale exist
A) up to output Q2.
B) from Q2 to Q5.
C) after Q5.
D) over the entire long-run average cost curve.

Question

-Refer to the above figure. Constant returns to scale exist
A) up to output Q2. 
B) from Q2 to Q5. 
C) after Q5. 
D) over the entire long-run average cost curve.

Quizplus · Accepted Answer

Constant returns to scale occur when the long-run average cost remains constant as output increases, which is typically represented by a flat section of the long-run average cost curve, such as from Q2 to Q5.

-Refer to the Above Figure