In the above figure, the long-run equilibrium real GDP is

Carefully explain if the following statements are true, false, or uncertain

a. If average cost is increasing, marginal cost must be increasing. b. If there are diminishing returns, the marginal cost curve must be positively sloped. c. Marginal costs decrease as output increases because the firm can spread fixed costs over more units.

In the long run, a firm is said to be experiencing decreasing returns to scale if a 10 percent increase in inputs results in

A) an increase in output from 100 to 110. B) a decrease in output from 100 to 90. C) an increase in output from 100 to 105. D) a decrease in output from 100 to 85.