An Example of Increasing Returns to Scale Is When Capital

question 56

Multiple Choice

An example of increasing 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 decreases 5 percent.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for a more accurate comparison of actual to budgeted expenses.

Tenant-Days

A measure used in property management to calculate the number of days a property is occupied by tenants over a certain period.

Administrative Expenses

Overheads and expenses associated with the general operation of a business.

Client-Visits

Refers to the occasions on which a service provider or salesperson visits clients at their location to build relationships, offer support, or close sales.