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25 September, 12:57

A firm doubles the quantity of all resources it employs and, as a result, output doubles. Which of the following is correct?

a. There are increasing returns to scaleb. The long-run average total cost curve is flatc. The law of diminishing returns is proven wrongd. The example is for the short run rather than the long run

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  1. 25 September, 13:22
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    The long-run average total cost curve is flat

    Explanation:

    When the quantity of all the resources is doubled and, as a result, output doubles then the firm experiences constant returns to scale.
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