Constant returns to scale means that long-run:
A) ATC increases as output increases.
B) ATC decreases as output decreases.
C) ATC rises and then falls as output increases.
D) ATC does not change as output increases.

Question

Quizplus · Accepted Answer

Constant returns to scale imply that as the scale of production increases, the average total cost (ATC) remains unchanged, indicating that the firm is equally efficient at all levels of production.

Constant Returns to Scale Means That Long-Run