The term "constant returns to scale" describes a situation where expanding all inputs dramatically increases the average cost of production. O the quantity of output rises and the average cost of production falls. O expanding all inputs does not much change the average cost of production. O firms are necessarily earning negative economic profits.
The term "constant returns to scale" describes a situation where expanding all inputs dramatically increases the average cost of production. O the quantity of output rises and the average cost of production falls. O expanding all inputs does not much change the average cost of production. O firms are necessarily earning negative economic profits.
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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