When a Firm's Production Function Exhibits Constant Returns to Scale

question 49

Multiple Choice

When a firm's production function exhibits constant returns to scale:

• A) the short-run average cost curve will be horizontal.
• B) the long-run average cost curve will be U-shaped.
• C) the long-run marginal cost curve will be upward sloping.
• D) the short-run average variable cost curve will be downward sloping.
• E) the long-run average cost curve will be horizontal.

---

Definitions:

Performance Effectiveness

The degree to which objectives or goals are achieved, often measured by comparing outputs to predetermined standards or outcomes.

Work Efforts

The amount of physical or mental energy exerted by an individual to accomplish tasks and objectives in a job setting.

Performance Accomplishments

The achievements or outcomes that an individual or group has successfully realized, often measured against preset goals or standards.

Resource Costs

The expenses associated with acquiring the materials and labor needed to produce goods or services.