Suppose That a Firm Increases Its Inputs by 10% and Observes

question 140

Multiple Choice

Suppose that a firm increases its inputs by 10% and observes a 13% increase in output.The firm is

• A) experiencing increasing returns to scale.
• B) experiencing constant returns to scale.
• C) violating the law of diminishing marginal returns.
• D) increasing its average cost.
• E) reducing its total cost.

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