JAMB Economics 2012 Objective — Question 21

Question 21 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2012 Objective paper, with the correct answer and a full explanation.

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 scaleCorrect

Explanation

If firms vary all inputs in the long run, the firm will experience economies of scale since all inputs will be variable, thus, costs are spread on all inputs.

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