Constant returns to scale (CRS)implies that when the firm ________.
A)doubles all inputs,output more than doubles
B)doubles all inputs,output doubles
C)doubles all inputs,output increases by less than 100 percent
D)doubles all inputs,output remains constant
E)none of the above

Question

Quizplus · Accepted Answer

Constant returns to scale implies that doubling all inputs will result in the output doubling as well. This means that the firm is able to increase its output in proportion to the increase in its inputs, which is consistent with option B.

Constant Returns to Scale (CRS)implies That When the Firm ________