Related to the Economics in Practice on page 201: If the long-run average cost curve in an industry has a long, flat section, which of the following must be true?
A) There is no single point on the curve that is the best.
B) Small firms have higher average costs than large firms.
C) Existing firms have no incentive to expand.
D) There would be no difference between the industry's short-run average cost curve and its long-run average cost curve.

Question

Quizplus · Accepted Answer

A long, flat section on the long-run average cost curve indicates constant returns to scale, meaning there is no single optimal point, as costs remain the same over a range of outputs.

Related to the Economics in Practice on Page 201: If