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Suppose that the following long-run average cost function is obtained following the cost minimization: LRAC = wrQ^(a-1). Then, which of the following is correct based
Suppose that the following long-run average cost function is obtained following the cost minimization: LRAC = wrQ^(a-1). Then, which of the following is correct based on this cost function?
a) there is an increasing returns to scale if a > 1
b) there is a constant returns to scale if a > 1
c) there is a decreasing returns to scale if a > 1
d) returns to scale information can only be obtained from production function
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