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?
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?
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 20P
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- 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?
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