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Question : If a change in all input leads to a proportionate change in output, it is a case of:

Option 1: constant returns to the scale

Option 2: diminishing returns to the scale

Option 3: increasing returns to the scale

Option 4: variable returns to the scale


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: constant returns to the scale


Solution : The correct option is constant returns to the scale.

Returns to scale describe the long-term relationship between a rise in output and the corresponding increases in inputs. When adding more inputs causes an equivalent rise in output, it is called constant returns to scale (CRS). In other words, it is a case of constant returns to scale.

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