Question

Which of the following illustrates economies of scale , diseconomies of scale , and constant returns to scale ?

Answer 1

Answer: d. Liza faces economies of scale; Sam faces diseconomies of scale; Tina faces constant returns to scale

Explanation:

Economies of scale occurs when the increase in production by companies brings about a reduction in cost. Diseconomies of scale is when a rise in production leads to an increase in cost as well. For a constant return to scale, the cost remains the same.

Therefore, the answer will be option D "Liza faces economies of scale; Sam faces diseconomies of scale; Tina faces constant returns to scale".