The long-run average total cost of producing 100 units of output is $4, while the long-run average cost of producing 110 units of output is $4. These numbers suggest that the firm producing this output has:
A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) diminishing returns.

Question

Quizplus · Accepted Answer

The long-run average total cost remains the same when output increases from 100 to 110 units, indicating constant returns to scale.

The Long-Run Average Total Cost of Producing 100 Units of Output