Question

Use the long-run average total cost (LRATC) curve below to answer the 3 multiple choice questions.

As the firm moves from point A toward point B, they are experiencing: 

a. constant returns to scale. 

b. diseconomies of scale. 

c. economies of scale. 

 

As the firm moves from point B toward point C, they are experiencing:

a. constant returns to scale. 

b. diseconomies of scale. 

c. economies of scale. 

 

As the firm moves from point C toward point D, they experiencing:

a. constant returns to scale. 

b. diseconomies of scale. 

c. economies of scale.