If we increase all of our inputs on the farm and we get a proportional increase in output, this is an example of which of the following:
A)Increasing returns to scale.
B)Constant returns to scale.
C)Decreasing returns to scale.
D)Normal returns to scale.
E)none of the above.

Question

Quizplus · Accepted Answer

This scenario is an example of constant returns to scale, where increasing all inputs by a certain factor leads to an equal proportional increase in output.

If We Increase All of Our Inputs on the Farm