Re: ISI Interview Question

Posted by Asd1995 on Jun 18, 2017; 5:24pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-Interview-Question-tp7605699p7605820.html

Nothing really, it just tells you that returns to scale are not >1 i.e.  if he produced anywhere on the demand curve where profits are positive (which may be on the inelastic part, he will make infinite profits in the long run irrespective of the output he produces (given demand for its product is inelastic at the price p0)