When isoquants get progressively further apart there is
A)increasing returns to scale
B)decreasing returns to scale
C)constant returns to scale

Question

Quizplus · Accepted Answer

When isoquants get progressively further apart, it indicates that the marginal rate of technical substitution (MRTS) is increasing. In other words, the amount of one input that needs to be substituted for another input as output increases is getting larger. This implies decreasing returns to scale, indicating that doubling the inputs results in less than a doubling of output.

When Isoquants Get Progressively Further Apart There Is