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 if the production function exhibits IRTS, then the cost function will exhibit economies of scale if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
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 if the production function exhibits IRTS, then the cost function will exhibit economies of scale if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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
if the production function exhibits IRTS, then the cost function will exhibit economies of scale
if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale
if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS
if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale
if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
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