When increase in capital is accompanied by new knowledge and by increasing number of laborers,the producer experiences increasing returns.

Question

Quizplus · Accepted Answer

When capital is combined with new knowledge and a larger number of workers, the producer can experience increasing returns due to the increased efficiency and productivity of the production process. This is because new knowledge can lead to improved technology and processes, while additional workers can help to increase output and reduce costs. As a result, the producer can realize economies of scale, which can lead to increasing returns.

When Increase in Capital Is Accompanied by New Knowledge and by Increasing