Table 13-16
Listed in the table are the long-run total costs for three different firms.
-Refer to Table 13-16. Which firm is experiencing constant returns to scale?
A)Firm A only
B)Firm B only
C)Firm C only
D)Firm A and Firm B only

Question

Table 13-16
Listed in the table are the long-run total costs for three different firms. 
-Refer to Table 13-16. Which firm is experiencing constant returns to scale?
A)Firm A only 
B)Firm B only 
C)Firm C only 
D)Firm A and Firm B only

Quizplus · Accepted Answer

Firm B is experiencing constant returns to scale because its output increases proportionally with an increase in inputs, indicating that the average cost remains constant as the scale of production changes.

Table 13-16 Listed in the Table Are the Long-Run Total Costs for Costs