Economics · Theory of Production
A cement company doubles its output by expanding both its plant capacity and workforce proportionally, and its long-run average cost (LRAC) remains constant. This suggests the firm is operating under:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Economies of scale
- 2Diseconomies of scale
- 3Constant returns to scale✓
- 4A decreasing cost industry
Correct answer
Constant returns to scale
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