Multiple Choice
Which of the following statements is correct if a firm's capacity output increases from 400 to 800 and its total costs rise from $60,000 to $110,000?
A) The firm is experiencing constant returns to scale.
B) The firm is experiencing diseconomies of scale.
C) The firm is experiencing economies of scale.
D) The firm's long-run average cost must have decreased,but its short-run average cost could have either decreased or increased.
Correct Answer:
Verified
Correct Answer:
Verified
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