In the long run, a firm is said to be experiencing increasing returns to scale if a 10 percent increase in inputs results in :
A. an increase in output from 100 to 120.
B. a decrease in output from 100 to 90.
C. an increase in output from 100 to 105.
D. a decrease in output from 100 to 85.
Answer:A
In the long run, a firm is said to be experiencing increasing returns to scale if a 10 percent increase in inputs results in :
A. an increase in output from 100 to 120. B. a decrease in output from 100 to 90. C. an increase in output from 100 to 105. D. a decrease in output from 100 to 85.