Answer to Question #144580 in Microeconomics for Maungo Molefinyane

Question

If an industry’s long run average total cost curve has an extended range of constant returns to scale: 

 

A. Both relatively small and relatively large firms can be viable in the industry. B. Only relatively small firms can be viable in the industry. C. Short run production costs will increase. D. Production will be dominated by large firms. 

Answer 1

B. Only relatively small firms can be viable in the industry