In what order does a typical firm experience returns to scale?

IRS, DRS, CRS

No worries! We‘ve got your back. Try BYJU‘S free classes today!

IRS, CRS, DRS

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

CRS, DRS, IRS

No worries! We‘ve got your back. Try BYJU‘S free classes today!

CRS, IRS, DRS

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A IRS, CRS, DRS
The long run average cost curve takes a U shape to illustrate how average cost initially decreases due to economies of scale while the firm experiences increasing returns to scale. Then it exhibits constant returns as the firm operates at its optimal size. Lastly if the firm tries to expand more than its optimal point, due to diseconomies of scale while the firm experiences decreasing returns to scale and average cost increases.

Suggest Corrections

Similar questions

Discus the four major functions performed by business enterprises.

On scrutiny of the books of account, accountant found that, purchase return of Rs 1000 was omitted to be entered in the books of a/c. What shall be the rectifying entry for the same error.

Q. Discus the continuity of the following functons:

f (x) = sin x + cos x

Q. Fill in the blank with the most appropriate word.
Is there a time ________ we can discus this problem?

Q. If consumption is Rs 300 Cr. and income is Rs 300 crore, what is APC and what does this imply?

Join BYJU'S Learning Program