Jamal Owns a Coffee Roasting Company

question 86

Multiple Choice

Jamal owns a coffee roasting company.He buys raw coffee beans,roasts them,grinds them,and sells them to stores.He recently moved into a larger factory so that he can sell coffee to more stores.How would Jamal know if he is experiencing constant returns to scale from increasing the size of his factory?

• A) His long-run average cost per pound of coffee remains the same.
• B) His long-run total cost of roasting coffee remains the same.
• C) His long-run total cost of roasting coffee decreases.
• D) His long-run average cost per pound of coffee increases.
• E) His long-run average cost per pound of coffee decreases.

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