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If All Factors Are Variable In The Long Run Firms; Will Experience? - Erudites Academy

If all factors are variable in the long run firms; will experience?

by | Oct 22 | Economics JAMB | 0 comments

A. decreasing returns to scale
B. increasing returns to scale
C. diminishing returns
D. economies of scale

Correct Answer:

Option B – increasing returns to scale

Explanation

In the longrun, all production factors are variable (changes) and a firm operating in the longrun would enjoy increasing returns to scale because they will be operating at a higher level of output with lower cost.

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