Which of the following cost curves demonstrate increasing returns to scale?
A)a vertical long- run average cost curve
B)an upward- sloping long- run average cost curve
C)returns to scale have nothing to do with the shape of the long- run average cost curve
D)a horizontal long- run average cost curve
E)a downward- sloping long- run average cost curve

Question

Quizplus · Accepted Answer

A downward-sloping long-run average cost curve demonstrates increasing returns to scale, as output increases, the cost per unit decreases due to economies of scale.

Which of the Following Cost Curves Demonstrate Increasing Returns to Scale