An Example of Decreasing Returns to Scale Is When Capital

question 30

Multiple Choice

An example of decreasing returns to scale is when capital and labor inputs:

• A) both increase 10 percent and output increases 5 percent.
• B) both increase 10 percent and output increases 10 percent.
• C) both increase 5 percent and output increases 10 percent.
• D) do not change and output increases 5 percent.

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Definitions:

Cut

To reduce or decrease the size, amount, or number of something.

Discount

A reduction from the usual cost of something, typically for promotional reasons or to incentivize purchase.

Article

A written composition on a particular topic, often published in a newspaper or magazine.

Discount Period

The window of time in which a payment can be made at a reduced rate.