If a firm triples inputs and produces three times the output, then there are
A)constant returns to scale.
B)varying returns to scale.
C)decreasing returns to scale.
D)increasing returns to scale.

Question

Quizplus · Accepted Answer

When a firm triples its inputs and as a result, triples its output, it is experiencing constant returns to scale. This means that the output increases in the same proportion as the increase in inputs.

If a Firm Triples Inputs and Produces Three Times the Output