Exhibit 21-5

-Refer to Exhibit 21-5. Constant returns to scale are present between
A)points A and B.
B)points A and C.
C)points B and C.
D)points B and D.
E)points C and D.

Question

Exhibit 21-5
​
 
-Refer to Exhibit 21-5. Constant returns to scale are present between
A)points A and B. 
B)points A and C. 
C)points B and C. 
D)points B and D. 
E)points C and D.

Quizplus · Accepted Answer

Constant returns to scale occur when increasing the input results in a proportional increase in output. In the context of a production function or cost curve, this is typically represented by a linear segment. Between points B and C, the production or cost curve would show such a linear relationship, indicating constant returns to scale.

Exhibit 21-5 ​

Exhibit 21-5