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

Question

Quizplus · Accepted Answer

Decreasing returns to scale occur when doubling the inputs results in less than double the output, indicating that efficiency decreases as scale increases.

A Production Function Exhibits Decreasing Returns to Scale When You