Lauren owns a bakery. If she decided to expand the size of her bakery so that she could bake more bread, how would she know if she is experiencing constant returns to scale?
A) Her long-run average cost of baking each loaf of bread remains unchanged.
B) Her long-run total cost of baking bread decreases.
C) Her long-run average cost of baking each loaf of bread decreases.
D) Her long-run total cost of baking remains unchanged.
E) Her long-run average cost of baking each loaf of bread increases.
Correct Answer:
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