With ______________,inputs increase in direct proportion to the increase in output.

Question

Quizplus · Accepted Answer

Constant returns to scale refer to a situation where inputs increase in the same proportion as the increase in output. This means that the efficiency of production remains unchanged as the scale of production increases. For example, doubling the inputs will result in a doubling of output. This is different from increasing returns to scale where a proportionate increase in inputs leads to a more than proportionate increase in output, and decreasing returns to scale where the increase in output is less than proportionate to the increase in inputs. International returns to scale is not a valid term.

With ______________,Inputs Increase in Direct Proportion to the Increase in Output