Question

In the long run a company that produces and sells kayaks incurs total costs of $15,000 when output is 30 kayaks and $20,000 when output is 40 kayaks. the kayak company exhibits
a. constant returns to scale because average total cost is constant as output rises.
b. diseconomies of scale because average total cost is rising as output rises.
c. economies of scale because average total cost is falling as output rises.
d. diseconomies of scale because total cost is rising as output rises.

Answer 1

The right answer is b 99% right