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Q3 The figure below illustrates a series of short-run cost curves numbered AC, through AC4, which correspond to the only four different plant sizes possible.
Q3 The figure below illustrates a series of short-run cost curves numbered AC, through AC4, which correspond to the only four different plant sizes possible. ( 6 Marks) 2000 1600 ACZ AGS 1200 Costs 800 400 0 10 20 30 40 50 60 Quantity per period a) What can you say about returns to scale? b) Are economies of scale present? c) If it takes 6 workers and 30 units of capital to produce 10 units of output, how much labour and capital are necessary to produce 20 units of output
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