Asked by Sarah Boktor on Apr 25, 2024

The long-run average total cost of producing 100 units of output is $4,while the long-run average cost of producing 110 units of output is $4.These numbers suggest that between 100 and 110 units of output,the firm producing this output has:

A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) diminishing returns.

Returns to Scale

The rate at which output increases as inputs are proportionally increased, indicating either increasing, constant, or decreasing efficiency in production.

Long-Run Average Cost

The average cost per unit of output when all inputs, including capital, are variable, allowing for the adjustment of all factors in production to achieve the lowest cost.

Output

The quantity of goods or services produced in a given period of time.

  • Determine the impact of output variations on long-run average total costs.