(Appendix) The defining characteristics of increasing returns to scale may be summarized as A)F(cK,cL) cF(K,L). B)F(cK,cL) = cF(K,L). C)F(cK,cL)

Question

(Appendix) The defining characteristics of increasing returns to scale may be summarized as
A)F(cK,cL) > cF(K,L).
B)F(cK,cL) = cF(K,L).
C)F(cK,cL) < cF(K,L).
D)Q = min(aK,aL).

Quizplus · Accepted Answer

The defining characteristic of increasing returns to scale is that when both inputs are multiplied by a constant factor, the output increases by more than that constant factor. This can be expressed as F(cK,cL) > cF(K,L). Option A is the only statement that accurately represents this characteristic.

(Appendix) the Defining Characteristics of Increasing Returns to Scale May