Increasing Returns to Scale

question 6

Multiple Choice

Increasing returns to scale

• A) means that output rises proportionately less than inputs, increasing per unit cost of production in the short run.
• B) means that output rises proportionately more than inputs, resulting in increasing per unit costs.
• C) implies that the long- run average cost curve is shifting downward.
• D) has the same meaning as increasing costs of production.
• E) means that output rises proportionately more than inputs, resulting in lower per unit costs in the long run.

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Definitions:

Quality

Refers to the degree of excellence or superiority that an item, process, or service possesses.

Sentence Starter

A word or phrase used at the beginning of a sentence to engage the reader and give direction to the sentence’s structure.

Longer

Having greater length in time, duration, or physical measurement.

Justified Margins

The alignment of text the same way along both the left and right sides of a page, creating a clean and formal appearance.