Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help to answer the following multiple choice question and explain. Thanks. Question: When does a production function exhibit decreasing returns to scales? a) Decreasing

Please help to answer the following multiple choice question and explain. Thanks.

Question:

When does a production function exhibit decreasing returns to scales?

a) Decreasing returns to scale may happen if there is a fixed factor such as land in the production function, and this fixed factor becomes scarce as the economy grows larger

B. A production function shows decreasing returns to scale if an equal percentage increase in factors of production leads to a smaller percentage increase in output.

C) A production function shows decreasing returns to scale if an equal percentage increase in factors of production leads to a smaller percentage increase in output. This is because factors of production become scare as the economy grows.

D) A production function may show decreasing returns to scale of the costs of inputs increase.

Regards,

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jan Williams, Susan Haka

17th Edition

126000645X, 9781260006452

More Books

Students also viewed these Economics questions

Question

The quality of the argumentation

Answered: 1 week ago