One of the complaints about Tesla cars is the cost of the cars. A Tesla Model...
One of the complaints about Tesla cars is the cost of the cars. A Tesla Model S costs $75,000, while the Model 3 costs $35,000. One reason that the Model 3 costs less is because Tesla produces many more Model 3's than Model S's. This is an example of
Group of answer choices
Increasing Returns to Scale
Decreasing Returns to Scale
Constant Returns to Scale
Network Economies of Scale
Homework Answers
Answer : The answer is option A.
When production level increase and average cost level decrease then the firm face a situation of increasing returns to scale. Here the cost level falls when the production level increases. This means that here Tesla faces increasing returns to scale situation. Therefore, option A is correct.
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One of the complaints about Tesla cars is the cost of the cars.
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