Which of the Following Statements Is (Are) TRUE

question 96

Multiple Choice

Which of the following statements is (are) TRUE?
I. If a firm has economies of scale, long-run average total cost rises with increases in output.
II. Diseconomies of scale are associated with the portion of the long-run average total cost curve that slopes upward.
III. For the long-run average total cost curve to slope downward, the total cost of production must increase less than proportionately with output.
IV. A firm may have economies of scale despite a production function with constant returns to scale.

• A) I, II, and III
• B) II, III, and IV
• C) II and III
• D) I