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Suppose that a firm has the Cobb-Douglas production function Q = 12K ^ (0.75) L^ (0.25)....

Suppose that a firm has the Cobb-Douglas production function Q = 12K ^ (0.75) L^ (0.25). Because this function exhibits (constant, decreasing, increasing) returns to scale, the long-run average cost curve is (upward-sloping, downward-sloping, horizontal), whereas the long-run total cost curve is upward-sloping, with (an increasing, a declining, a constant) slope.

Now suppose that the firm’s production function is Q = KL. Because this function exhibits (constant, decreasing, increasing) returns to scale, the long-run average cost curve is (upward-sloping, downward-sloping, horizontal), whereas the long-run total cost curve is upward-sloping, with (an increasing, a declining, a constant) slope.

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