Farmer Seth has a perfectly flat long- run average total cost curve over the range of output from 1,000 tonnes of wheat to 10,000 tonnes of wheat. Hence, over this range of output, Farmer Seth definitely experiences
A) constant economies of scale.
B) constant returns to scale.
C) constant marginal returns.
D) None of the above.

Question

Quizplus · Accepted Answer

A perfectly flat long-run average total cost curve indicates that costs per unit do not change as the scale of production increases, which is characteristic of constant returns to scale. This means that doubling the inputs will exactly double the output, without any efficiencies or inefficiencies introduced by scaling up or down.

Farmer Seth Has a Perfectly Flat Long- Run Average Total