-In the above figure, the long-run average cost curve exhibits constant returns to scale
A) between 5 and 10 units per hour.
B) between 10 and 20 units per hour.
C) between 20 and 25 units per hour.
D) along the entire curve.

Question

-In the above figure, the long-run average cost curve exhibits constant returns to scale
A) between 5 and 10 units per hour. 
B) between 10 and 20 units per hour. 
C) between 20 and 25 units per hour. 
D) along the entire curve.

Quizplus · Accepted Answer

Constant returns to scale occur when the long-run average cost remains constant as output increases. This is typically represented by a flat section of the long-run average cost curve, which is between 10 and 20 units per hour in this case.

-In the Above Figure, the Long-Run Average Cost Curve Exhibits