Examlex

Solved

A Firm Increases Both Its Plant and Its Labor Force

question 267

Essay

A firm increases both its plant and its labor force by the same percentage and its average total costs remain unchanged. Is the firm experiencing increasing returns to scale, constant returns to scale, or decreasing returns to scale?


Definitions:

Amortizes Loans

Loans for which periodic payments are made that include both interest and principal, gradually reducing the outstanding balance.

Monthly Payments

Regular payments made each month by a borrower to a lender, often as part of a loan repayment plan.

Loan Terms

Loan terms are the specific conditions and details agreed upon by the lender and borrower, including interest rate, repayment schedule, and duration of the loan.

Amortized Loan

A loan with scheduled periodic payments that cover both principal and interest over the loan's term until it is paid off at maturity.

Related Questions