Constant returns to scale are said to exist when inputs are increased by some percentage and output increases by a(n) __________ percentage, causing unit costs to __________.
A)greater; fall
B)smaller; fall
C)greater; rise
D)smaller; rise
E)equal; remain constant

Question

Quizplus · Accepted Answer

Constant returns to scale occur when increasing inputs by a certain percentage leads to an equal percentage increase in output, resulting in unchanged unit costs.

Constant Returns to Scale Are Said to Exist When Inputs