Post Utme Bells University 2022 Economics Question 18

Practice objective / multiple choice question 18 from the 2022 Post Utme Bells University Economics examination.

Post Utme Bells University 2022 Economics Objective / Multiple Choice
Question 18 POST_UTME_BELLS_UNIVERSITY • 2022 • ECONOMICS • objective

U\sing the concept of returns to scale, explain why a firm may experience decrea\sing returns to scale in the short run but increa\sing returns to scale in the long run.

Answer Options

Correct Answer A. In the short run, a firm may experience decrea\sing returns to scale due to fixed \costs, but in the long run, it can increase its production and experience increa\sing returns to scale.
B. A firm always experiences increa\sing returns to scale in the long run.
C. Decrea\sing returns to scale is a characteristic of the long run, not the short run.
D. Increa\sing returns to scale is a characteristic of the short run, not the long run.
Correct Answer
A
Correct Option:
In the short run, a firm may experience decrea\sing returns to scale due to fixed \costs, but in the long run, it can increase its production and experience increa\sing returns to scale.

About This Question

This is Post Utme Bells University 2022 Economics Question 18. It is one of the objective questions from the 2022 Post Utme Bells University Economics examination.

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