A production function exhibits constant returns to scale if:
A) when you hold inputs constant, you double the output
B) when you double each input, you more than double the output
C) when you double each input, you less than double the output
D) when you double one input, you double the output
E) when you double each input, you double the output

Question

Quizplus · Accepted Answer

Constant returns to scale occur when doubling all inputs produces exactly double the output. This is what choice E describes, making it the best answer.

A Production Function Exhibits Constant Returns to Scale If