Increasing returns to scale occur when a 50% increase in all inputs
A) increases output by 50%.
B) increases output by more than 50%.
C) increases input prices by more than 50%.
D) increases output by less than 50%.
E) decreases output by more than 50%.

Question

Quizplus · Accepted Answer

Increasing returns to scale occur when a proportional increase in all inputs leads to a more than proportional increase in output. This means that if all inputs are increased by 50%, then output will increase by more than 50%. Therefore, the correct answer is B.

Increasing Returns to Scale Occur When a 50% Increase in All