For Production Functions with Decreasing Returns to Scale, a Proportional

question 20

Multiple Choice

For production functions with decreasing returns to scale, a proportional increase in output

• A)requires a less-than-proportional growth in all inputs.
• B)requires a more-than-proportional growth in all inputs.
• C)exhibits diminishing returns.
• D)requires proportional growth in all inputs.

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Definitions:

Full-Line Forcing

A sales strategy where a supplier requires a retailer to carry its entire product line to obtain any of the supplier's products.

Tying Arrangement

A business practice where a seller requires a buyer to purchase another one of the seller's products as a condition of purchasing the desired product.

Exclusive Dealing

An agreement between a supplier and a retailer or distributor in which the retailer agrees to only purchase from that supplier and not from its competitors.

Full-Line Forcing

A business practice where a supplier requires retailers to stock an entire range of products in order to carry any of the supplier's items.