Assume That a Firm's Total Cost of Producing an Output

question 30

Multiple Choice

Assume that a firm's total cost of producing an output of 300 units is currently $30,000.If output increases to 600 units,total cost increases to $60,000 and the price of inputs and technology remain unchanged,state whether constant returns to scale,economies of scale or diseconomies of scale exist in this case.

• A)Economies of scale
• B)Diseconomies of scale
• C)Constant returns to scale
• D)Increasing returns to scale

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