2.6 Indicate whether you agree or disagree with the following statements. Briefly explain your answers.

a. Increasing returns to scale refers to a situation where an increase in a firm’s scale of production leads to higher costs per unit produced.

b. Constant returns to scale refers to a situation where an increase in a firm’s scale of production has no effect on costs per unit produced.

c. Decreasing returns to scale refers to a situation where an increase in a firm’s scale of production leads to lower costs per unit produced.