If a firm increases all its inputs by 10 percent and its output increases by 15 percent, the firm is experiencing diseconomies of scale.

Name: If a firm increases all its inputs by 10 percent and its output increases by 15 percent, the firm is experiencing diseconomies of scale.
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Question

Quizplus · Accepted Answer

The firm is experiencing economies of scale because its output increases by a greater percentage than the increase in inputs, indicating increasing returns to scale.

If a Firm Increases All Its Inputs by 10 Percent