A firm finds that at an output level of 7 units, its total cost is $1834; at 8 units of output, its cost is $2048.
a. measuring economies of scale calculate the value of S for this firm at 8 units of output
b. Are there economies of scale at 8 units of output? Explain your reasoning.
c. Explain what the value of S tells you about the relationship between increasing output and increasing costs for this firm. Be as specific as possible in your answer.
Course: Industrial Organization Theory by Waldman