Increasing returns in production imply the following, except
A) increasing labor-requirements per unit of output.
B) decreasing per-unit production costs.
C) economies of scale.
D) an increase in the productivity of inputs.

Question

Quizplus · Accepted Answer

Increasing returns in production refer to the situation where an increase in input leads to a more than proportionate increase in output. This implies that the per-unit production costs decrease due to economies of scale and an increase in the productivity of inputs. However, increasing labor-requirements per unit of output does not necessarily follow this concept. In fact, increasing returns may lead to a decrease in labor-requirements per unit of output as the production process becomes more efficient.

Increasing Returns in Production Imply the Following, Except