Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as a result its output increases by 5%. a. What kinds of returns to scale is this company experiencing (decreasing, increasing, or constant)? Explain. B. That will happen to this firm's long-run average total cost as the output of cars increases?

Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as a result its output increases by 5%. a. What kinds of returns to scale is this company experiencing (decreasing, increasing, or constant)? Explain. B. That will happen to this firm's long-run average total cost as the output of cars increases?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 21PAE

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