Question 5 [6 points] Suppose that Stiller Co. can produce 10 units a day at a total cost of $2000. If technology and input prices remain the same and total cost increases to $10000, what must be the new quantity of output per day under each of the following conditions? Note: If the output does not change, enter 0 as the amount. a) Constant returns to scale Output (select one) 0 units per day b) Economies of scale Output (select one) 0 units per day c) Diseconomies of scale Output (select one) 0 units per day
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In this case, since the total cost is $2000 for 10 units, the cost per unit is $2000/10 = $200. Show more…
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