Answer:
The constant return to scale is incompatible with perfect competition because in a perfect competition the competitive firm as a price taker exercises no influence over the market price of its product. Therefore, the constant return to scale does not enable the competitive firm to have enough revenue to pay competitive prices for its inputs. Inevitably, a constant return to scale is incompatible with perfect competition.
Step-by-step explanation:
A constant return to scale suggests that the market value of the inputs equals the value of the outputs. When this situation persists, there is no profit. With this prevailing circumstance, the competitive firm lacks the required resources to compete effectively in the market.