FIGURE 8-2 -Refer to Figure 8-2.Increasing returns to scale occur over the output range A)0 to Q₁ only. B)Q₁ to Q₂ only. C)Q₂ to Q₃ only. D)0 to Q_{3 only}. E)beyond Q_{3 only}.

Question

Quizplus · Accepted Answer

Increasing returns to scale occur over the output range from 0 to Q₃, which is the point where the long-run average cost curve reaches its minimum. Therefore, the correct choice is D, which includes this entire range.

FIGURE 8-2 -Refer to Figure 8-2.Increasing Returns to Scale Occur Over the Over