If the output elasticities of all inputs used by a firm are summed together, then the total
A) will be greater than one if returns to scale are decreasing.
B) will be equal to one if returns to scale are constant.
C) will be less than one if returns to scale are increasing.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

The sum of output elasticities of all inputs equals one when a firm experiences constant returns to scale.

If the Output Elasticities of All Inputs Used by a Firm