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If a Firm Builds a Larger Plant and Constant Returns

Question 100

Multiple Choice

If a firm builds a larger plant and constant returns to scale apply,which of the following statements is correct?


A) The capacity output of the larger plant has a lower average cost.
B) The capacity output of the larger plant has the same average cost.
C) Economies of scale are present.
D) LRAC will decrease as output increases.

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