Wolfsburg Wagon (WW) is a small automaker. The accompanying table shows WW’s long-run average total cost. Quantity of cars LRATC of car 1 $30,000 2 20,000 3 15,000 4 12,000 5 12,000 6 12,000 7 14,000 8 18,000 For which levels of output does WW experience increasing returns to scale? For which levels of output does WW experience decreasing returns to scale? For which levels of output does WW experience constant returns to scale?

Exploring Economics
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ISBN:9781544336329
Author:Robert L. Sexton
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Chapter11: The Firm: Production And Costs
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  1. Wolfsburg Wagon (WW) is a small automaker. The accompanying table shows WW’s long-run average total cost.
    Quantity of cars LRATC of car
    1 $30,000
    2 20,000
    3 15,000
    4 12,000
    5 12,000
    6 12,000
    7 14,000
    8 18,000
    1. For which levels of output does WW experience increasing returns to scale?
    2. For which levels of output does WW experience decreasing returns to scale?
    3. For which levels of output does WW experience constant returns to scale? 
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