Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%.
Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all its inputs by 10%, its: A. total cost will increase by less than 10% B. average total cost will increase by 10% C. output will increase by 10%. D. long run average cost curve will shift to the right by 10%.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 5CQQ
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Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases
all its inputs by 10%, its:
A. total cost will increase by less than 10%
B.
C. output will increase by 10%.
D. long run average cost curve will shift to the right by 10%.
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