If a bakery buys a second oven, hires a second baker, buys double the number of ingredients, doubles the size of the bakery, and then produces double the number of cakes, then the bakery is experiencing:

Question

Quizplus · Accepted Answer

Doubling all inputs (oven, baker, ingredients, and size of the bakery) and getting double the output (number of cakes) indicates constant returns to scale, meaning output increases proportionally to inputs.

If a Bakery Buys a Second Oven, Hires a Second