**Statement:**If a firm has a constant returns to scale production function F(K,L), then the break-even price does not depend on the input prices (w, r).**Options:**- ○ True- ○ False**Explanation:**This statement concerns the relationship between a firm's production function, input prices, and break-even price. When a firm experiences constant returns to scale, doubling the inputs (capital K and labor L) results in doubling the output. The question is asking if under this condition, the break-even price, which is the price at which total revenue equals total costs, remains unaffected by the input prices of capital (w) and labor (r).

A constant returns to scale is a situation when an increase in inputs leads to a proportionate…

Answered: If a firm has a constant returns to…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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If a firm has a constant returns to scale production function F(K,L), then the break even price does not depend on the input prices (w,r) True False