Which of the following will NOT cause increasing returns to scale and declining average costs?
A) focusing on a single product line and specializing
B) exporting goods to other countries
C) selling more in their home market
D) hiring more workers at the existing plant

Question

Quizplus · Accepted Answer

Hiring more workers at the existing plant will eventually lead to diminishing returns to scale and increasing average costs due to overcrowding and less efficient use of resources. The other options (focusing on a single product line and specializing, exporting goods to other countries, and selling more in their home market) can all lead to economies of scale and declining average costs.

Which of the Following Will NOT Cause Increasing Returns to Scale