If a firm doubles its usage of all inputs and output less than doubles,the production function is said to exhibit:
A)increasing returns to scale.
B)decreasing returns to scale.
C)constant returns to scale.
D)decreasing marginal returns to a fixed factor of production.

Question

Quizplus · Accepted Answer

When a firm doubles its usage of all inputs and output less than doubles, it exhibits decreasing returns to scale. This means that the increase in input does not result in a proportionate increase in output, indicating inefficiencies or limitations in the production process.

If a Firm Doubles Its Usage of All Inputs and Output