If the economy is characterized by increasing 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

Increasing returns to scale means that when inputs are doubled, output more than doubles. Therefore, option A is the correct answer.

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