A Manufacturer of Towels Finds That His Returns to Scale

question 55

Multiple Choice

A manufacturer of towels finds that his returns to scale are constant.Which of the following conclusions can be drawn?

• A)The long-run total cost curve is horizontal.
• B)The long-run average cost curve is horizontal.
• C)The long-run total cost curve is downward sloping.
• D)The long-run average cost curve is downward sloping.

---

Definitions:

Expected Number

The anticipated count or amount in a set of occurrences or outcomes based on probability.

Binomial Distributions

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given number of observations.

Normal Distributions

Bell-shaped curves that are used in statistics to represent the distribution of a data set where most values cluster around a central region.

Normal Probability Distribution

A bell-shaped distribution that is symmetrical around the mean, representing the distribution of many types of data.