Economics · Theory of Production and Costs
Assertion (A): A continuously declining long-run average cost curve necessarily implies the existence of internal economies of scale. Reason (R): In the long run, all factors of production are variable and firms can adjust plant size optimally. Choose the correct option:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false but R is true
- 2A is true but R is false
- 3Both A and R are true but R is not the correct explanation of A✓
- 4Both A and R are true and R is the correct explanation of A
Correct answer
Both A and R are true but R is not the correct explanation of A
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