Which of the Following Statements Is Correct If a Firm's

question 60

Multiple Choice

Which of the following statements is correct if a firm's capacity output increases from 300 to 600 and its total costs rise from $40,000 to $78,000?

• A)The firm is experiencing constant returns to scale.
• B)The firm is experiencing decreasing returns to scale.
• C)The firm is experiencing increasing returns to scale.
• D)The firm's long-run average cost must have decreased but its short-run average cost could have either decreased or increased.

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