When a Firm Faces Constant Returns to Scale, a Proportionate

question 28

Multiple Choice

When a firm faces constant returns to scale, a proportionate increase in all inputs:

• A) will keep output constant.
• B) will increase output by the same proportion as the increase in inputs.
• C) will lead to a decline in the cost of production.
• D) will result in a higher-than-proportionate increase in output.
• E) will not change the total costs of production.

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Definitions:

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