Figure 13-10 -Refer to Figure 13-10. The firm experiences constant returns to scale if it changes its level of output from A)Q₁ to Q₂. B)Q₂ to Q₄. C)Q₁ to Q₃. D)Q₄ to Q₅.

Question

Quizplus · Accepted Answer

Constant returns to scale occur when increasing the level of output does not change the average cost of production. This typically happens over a range of output where the long-run average cost curve is flat, which is likely between Q₂ and Q₄.

Figure 13-10 -Refer to Figure 13-10. the Firm Experiences Constant Returns to Constant