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Question
Rahim owns a candy factory. If he decided to expand the size of his factory so that he could make more candy, how would he know if he is experiencing constant returns to scale?
a. His long-run average cost of making each piece of candy remains unchanged.
b. His long-run total cost of making candy decreases.
c. His long-run average cost of making each piece of candy decreases.
d. His long-run total cost of making candy remains unchanged.
e. His long-run average cost of making each piece of candy increases.
Answer
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