For production functions with decreasing returns to scale, a proportional increase in output
A)requires a less-than-proportional growth in all inputs.
B)requires a more-than-proportional growth in all inputs.
C)exhibits diminishing returns.
D)requires proportional growth in all inputs.

Question

Quizplus · Accepted Answer

CFor production functions with decreasing returns to scale, a more-than-proportional growth in all inputs is required to achieve a proportional increase in output, which is a characteristic of diminishing returns. This means as more inputs are used, the additional output generated from those inputs decreases.

For Production Functions with Decreasing Returns to Scale, a Proportional