Suppose that three isoquants that represent 10, 20, and 30 units of output are plotted on a graph and a straight line is drawn from the origin through the isoquants. If the portion of the line between the isoquants that represent 10 and 20 units of output is longer than the portion of the line between the isoquants that represent 20 and 30 units of output, then the firm represented by these isoquants
A) has engaged in product innovation.
B) is experiencing increasing returns to scale.
C) is experiencing decreasing returns to scale.
D) will maximize profits by producing 10 units of output.
Correct Answer:
Verified
Q2: Production refers to all activities involved in
Q3: Scale is a short-run concept.
Q4: The firm plans in the short run
Q5: The slope of the short-run production function
Q6: The marginal resource cost of an input
Q7: Ridge lines drawn on an isoquant map
Q8: Firms will only operate at points on
Q9: The absolute value of the slope of
Q10: The closer an isoquant is to a
Q11: If the marginal rate of technical substitution
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