If the economy is characterized by constant returns to scale,then a
A)doubling of inputs will lead to a more than two-fold increase in output.
B)doubling of inputs will lead to a constant output.
C)doubling of inputs will lead to a two-fold increase in output.
D)doubling of inputs will lead to a less than two-fold increase in output.

Question

Quizplus · Accepted Answer

Constant returns to scale mean that increasing all inputs by the same proportion will result in an increase in output by the same proportion. Therefore, doubling inputs will lead to a two-fold increase in output.

If the Economy Is Characterized by Constant Returns to Scale,then