6. Which of the following are true (check all that apply) Note: IRTS=increasing returns to scale, CRTS=constant returns to scale, DRTS=decreasing returns to scale a. if the production function exhibits IRTS, then the cost function will exhibit economies of scale b. if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale c. if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS d. if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale e. if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
6. Which of the following are true (check all that apply) Note: IRTS=increasing returns to scale, CRTS=constant returns to scale, DRTS=decreasing returns to scale a. if the production function exhibits IRTS, then the cost function will exhibit economies of scale b. if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale c. if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS d. if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale e. if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.9P
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6. Which of the following are true (check all that apply)
Note: IRTS=increasing returns to scale, CRTS=constant returns to scale, DRTS=decreasing returns to scale
a. if the production function exhibits IRTS, then the cost function will exhibit economies of scale
b. if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale
c. if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS
d. if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale
e. if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
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