Assume a firm is using 10 units of capital and 10 units of labour to produce 10 widgets per hour.By doubling both inputs the result is a doubling of output.This firm is experiencing
A)constant returns to scale.
B)economies of scale.
C)diseconomies of scale.
D)increasing costs.
E)decreasing returns.

Question

Quizplus · Accepted Answer

The firm is experiencing constant returns to scale because doubling the inputs results in a doubling of output, indicating that the output increases proportionally with the increase in inputs.

Assume a Firm Is Using 10 Units of Capital and 10