If a firm has increasing returns to scale at all levels of output, the
A)slope of its long-run total cost curve is always negative.
B)slopes of its short-run average cost curves are always negative.
C)slope of its long-run average cost curve is always negative.
D)slope of its production function is always negative.

Question

Quizplus · Accepted Answer

If a firm has increasing returns to scale at all levels of output, it means that the long-run average cost curve is always decreasing. This is because as the firm produces more output, it experiences lower average costs due to economies of scale, resulting in a negative slope for the long-run average cost curve. The other options are incorrect because they do not necessarily hold true in this scenario.

If a Firm Has Increasing Returns to Scale at All