Question: Suppose that the following long-run average cost function is obtained following the cost minimization: LRAC = wrQ^(a-1). Then, which of the following is correct based

Suppose that the following long-run average cost function is obtained following the cost minimization: LRAC = wrQ^(a-1). Then, which of the following is correct based on this cost function?

a) there is an increasing returns to scale if a > 1

b) there is a constant returns to scale if a > 1

c) there is a decreasing returns to scale if a > 1

d) returns to scale information can only be obtained from production function

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