If all factors are variable in the long run,firms will experience
ECONOMICS
JAMB 2012
If all factors are variable in the long run,firms will experience
- A. decreasing returns to scale
- B. increasing returns to scale
- C. diminishing returns
- D. economies of scale
Correct Answer: 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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