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If a Firm Doubles the Amount of Labor It Uses

Question 55

Multiple Choice

If a firm doubles the amount of labor it uses and triples the amount of capital it uses but its level of output less-than-triples as a result,what can be said about the firm's returns to scale?


A) This firm has increasing returns to scale.
B) This firm has decreasing returns to scale.
C) This firm has constant returns to scale.
D) Nothing can be determined about this firm's returns to scale based on the information given.

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