Returns to scale can be evaluated by looking at how output changes along _____.
A)a ray from the origin
B)the points of intersection of two or more isoquants
C)the horizontal axis
D)an isoquant.

Question

Quizplus · Accepted Answer

Returns to scale are evaluated by looking at how output changes as all inputs change by the same proportion, which is represented graphically by moving along a ray from the origin in input space. This method keeps the input proportions constant while varying the scale of operation.

Returns to Scale Can Be Evaluated by Looking at How