__________ scale exist when inputs are increased by some percentage and output increases by a smaller percentage, whereas __________ scale exist when inputs are increased by some percentage and output increases by the same percentage.
A)Economies of; diseconomies of
B)Constant returns to; economies of
C)Diseconomies of; constant returns to
D)Diseconomies of; economies of

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when inputs are increased by a certain percentage and output increases by a smaller percentage, indicating a decrease in efficiency. Constant returns to scale occur when inputs are increased by a certain percentage and output increases by the same percentage, indicating stable efficiency.

__________ Scale Exist When Inputs Are Increased by Some Percentage