If all factors are variable in the long run,firms will experience
A.
decreasing returns to scale
B.
increasing returns to scale
C.
diminishing returns
D.
economies of scale
Correct Answer: Option B
Explanation
In the longrun, all production factors are variable (changes) and a firm operating in the longrun would enjoy increasing returns to scale because they will be operating at a higher level of output with lower cost.
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