The Figure Given Below Shows Three Short Run Average Total

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3

-If long-run costs are plotted on the vertical axis and quantity of output plotted on the horizontal axis, a positively sloped line implies _____.

A) constant returns to scale
B) economies of scale
C) diseconomies of scale
D) an increase in capital-labor ratio
E) a decrease in cost-output ratio

Correct Answer:

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