Suppose a firm doubles its employment of all inputs in the long run.If this action more than doubles the amount of output produced,then this firm is experiencing
A) increasing returns to scale.
B) diminishing marginal returns.
C) technological progress.
D) positive marginal revenue.

Question

Quizplus · Accepted Answer

Increasing returns to scale occur when proportionate increase in all factor inputs leads to more than proportionate increase in output, which is the case in this scenario where doubling all inputs results in more than doubling the output.

Suppose a Firm Doubles Its Employment of All Inputs in the Long