Below Is Short-Run Cost Data for Four Different Plant Sizes

question 106

Multiple Choice

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.

-Refer to the information above to answer this question.Given the cost data above,which of the following statements is correct?

• A)This firm experiences constant returns to scale.
• B)This firm experiences increasing returns to scale.
• C)This firm experiences decreasing returns to scale.
• D)This firm experiences constant,increasing and decreasing returns to scale.
• E)No comment about returns to scale can be made.

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