If doubling the quantity of inputs more than doubles the quantity of outputs, the firm is experiencing
A) increasing returns to scale.
B) decreasing returns to scale.
C) constant returns to scale.
D) increasing costs per unit of output.

Question

Quizplus · Accepted Answer

If doubling the quantity of inputs more than doubles the quantity of outputs, the firm is experiencing increasing returns to scale. This means that the firm can produce more output with a smaller increase in inputs.

If Doubling the Quantity of Inputs More Than Doubles the Quantity