Suppose you build bird houses. One day, you double the time you spend building and double the wood, nails, paint, and all the other inputs in order to build twice as many bird houses. What kind of production function is this?
A) decreasing returns to scale
B) zero returns to scale
C) constant returns to scale
D) increasing returns to scale

Question

Quizplus · Accepted Answer

Doubling all inputs to double the output indicates constant returns to scale, meaning output increases in direct proportion to inputs.

Suppose You Build Bird Houses