If a firm doubles its use of all inputs and output more than doubles, the firm is experiencing:
A) constant returns to scale
B) decreasing returns to scale
C) increasing marginal returns to a fixed factor
D) increasing returns to scale

Question

Quizplus · Accepted Answer

The firm is experiencing increasing returns to scale because the output increases by a greater proportion than the increase in inputs.

If a Firm Doubles Its Use of All Inputs and Output