When a Firm Experiences Constant Returns to Scale

question 104

Multiple Choice

When a firm experiences constant returns to scale,

• A)long-run average total cost is unchanged, even when output increases.
• B)long-run marginal cost is greater than long-run average total cost.
• C)long-run marginal cost is less than long-run average total cost.
• D)the firm is experiencing coordination problems.

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Definitions:

Utilization

The process of using resources or capabilities effectively and efficiently.

Market Position

The standing of a company or its products in the eyes of customers relative to its competitors, often measured by market share, reputation, and customer preference.

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Focus Strategy

A business approach where a company concentrates its resources on entering or expanding in a narrow market or industry segment.