With constant returns to scale and factor prices invariant with the amount of factors used, the long-run output expansion path is

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Quizplus · Accepted Answer

With constant returns to scale and factor prices unchanged with the quantity of factors used, the long-run output expansion path is a straight line. This implies that as the quantity of all factors is increased proportionately, output will rise by the same proportion. Therefore, the output/input ratio will remain constant, resulting in a linear relationship between output and input.

With Constant Returns to Scale and Factor Prices Invariant with the Amount