Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as a result its output increases by 5%. a. What kinds of returns to scale is this company experiencing (decreasing, increasing, or constant)? Explain. B. That will happen to this firm's long-run average total cost as the output of cars increases?

Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as a result its output increases by 5%. a. What kinds of returns to scale is this company experiencing (decreasing, increasing, or constant)? Explain. B. That will happen to this firm's long-run average total cost as the output of cars increases?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 20P

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