Homework Answers
Ans.38- (C)
If long run average costs are constant with respect to output, then you have constant returns to scale. If average costs rise with output, you have decreasing returns to scale or diseconomies of scale.
Ans.39- (A)
Ans.40- (A)
Attractive industries have LOW:
1. supplier power
2. buyer power
3. threat of entry
4. threat of substitutes
5. rivalry
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