Suppose Honda can triple its production of Civics by tripling its production facility for those cars. This indicates the presence of
A)constant returns to scale.
B)economies of scale.
C)diseconomies of scale.
D)the law of diminishing returns.
E)minimum efficient scale.

Question

Quizplus · Accepted Answer

When Honda triples its production facility and production triples as well, it indicates constant returns to scale, where output increases in direct proportion to inputs.

Suppose Honda Can Triple Its Production of Civics by Tripling