Question 1
When ________ scale of production leads to ________ average costs, an industry exhibits decreasing returns to scale.
◦ decreased; higher
◦ increased; unchanging
◦ increased; higher
◦ increased; lower
Question 2
When ________ scale of production leads to ________ average costs, an industry exhibits increasing returns to scale.
◦ decreased; lower
◦ decreased; higher
◦ increased; higher
◦ decreased; unchanging