ECONOMICS

Detailed explanation-1: -Answer and Explanation: The property where the long run average total costs remains the same as the quantity of output changes is the constant returns to scale. It is a situation in the production function of the firm in the long run where all the inputs are variable.

Detailed explanation-2: -Constant returns to scale refers to the property whereby long-run average total cost stays the same as the quantity of output increases.

Detailed explanation-3: -The long-run average cost curve shows the lowest total cost to produce a given level of output in the long run.

Detailed explanation-4: -In sum, economies of scale refers to a situation where long run average cost decreases as the firm’s output increases. One prominent example of economies of scale occurs in the chemical industry.

Detailed explanation-5: -Firms experience economies of scale, otherwise known as increasing returns to scale, when the firm’s long-run average total cost becomes smaller as output is increasing. Firms employ economies of scale to create larger profit margins on the output produced.