A firm raises labour and capital by 50% each, and its output rises by 50%. It has

increasing returns to scaleCorrect answerYour answerconstant returns to scaleCorrect answerYour answerdecreasing returns to scaleCorrect answerYour answernegative returns to scaleCorrect answerYour answer

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CorrectNot quiteAnswer B

Correct answer: B

Output rising in exactly the same proportion as inputs is constant returns to scale.

Concept: Constant returns to scale
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsReturns to scale

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Ten questions from Production Function: TP, MP and AP, at your own pace.

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Ten questions from Production Function: TP, MP and AP, at your own pace.

Practise this chapter All 62 questions in Production Function: TP, MP and AP Revise the notes for Production Function: TP, MP and AP

A firm raises labour and capital by 50% each, and its output rises by 50%. It has

Explanation