The scale of a firm increases when
A)only one input increases while other inputs remain constant.
B)one input remains constant while other inputs increase.
C)some inputs increase while other inputs decrease.
D)all inputs remain constant.
E)all inputs increase.

Question

Quizplus · Accepted Answer

In order for the scale of a firm to increase, all inputs must increase. This means that the firm is producing more output and has a higher level of production. If only one input increases or some inputs increase while others decrease, the scale of the firm is not necessarily increasing as the output level may remain the same.

The Scale of a Firm Increases When