If Input Prices Are Constant, a Firm with Increasing Returns

question 107

Multiple Choice

If input prices are constant, a firm with increasing returns to scale can expect:

• A) costs to double as output doubles.
• B) costs to more than double as output doubles.
• C) costs to go up less than double as output doubles.
• D) to hire more and more labor for a given amount of capital, since marginal product increases.
• E) to never reach the point where the marginal product of labor is equal to the wage.

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Definitions:

Modality

Pertains to the way or method by which something is encountered, manifested, or articulated.

Multimodal

Pertaining to or utilizing more than one mode or method of transportation, communication, or expression.

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Frequency Polygons

A graphical representation of the distribution of a dataset that shows the frequencies of classes via connected dots.