1. The SRMC will always equal the LRMC at the point of minimum SRAC, when there are constant returns to scale. True or False. Explain.
2. SRMC will always equal LRMC at a level of output lower than LRAC whenever the production technology exhibits diminishing returns to scale. True or False. Explain. Click To Download C3T2 Question 2 Answer
3. The SRMC schedule will never intersect the LRMC schedule if the cost function exhibits increasing returns to scale everywhere. True or False? Explain.