What is the shape of a long run average cost curve
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5. Increasing returns to scale for a firm is shown graphically by (A) a horizontal long-run average cost curve. (B) a vertical long-run average cost curve. (C) an upward-sloping long-run average cost curve. (D) a downward-sloping long-run average cost curve. (E) none of the above; returns to scale have nothing to do with the shape of the long-run average cost curve. Answer:
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
What is increasing, constant, and decreasing returns to scale? How are they related to the shape of the long-run average cost curve?