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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Increasing returns to a factor is a short run phenomenon.
Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false.
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Direction: In the following questions, a statement of Assertion (A) i...
Increasing returns to scale relate to the long run in which all inputs are variable. Increasing marginal returns related to the short run in which one or more input is variable and one or more input is fixed.
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Direction: In the following questions, a statement of Assertion (A) i...
Increasing returns to a factor refer to a situation where the output increases at a greater rate than the increase in the quantity of a variable factor (such as labor or capital) while keeping other factors constant. This phenomenon is typically observed in the short run. On the other hand, fully utilization of the fixed factor means that the fixed factor is being used to its maximum capacity. Now let's evaluate the given Assertion (A) and Reason (R) to determine their accuracy and relationship.
Assertion (A) is true:
Increasing returns to a factor are indeed a short run phenomenon. In the short run, some factors of production, such as the size of the plant or the capacity of machinery, are fixed and cannot be easily changed. However, the variable factors, such as labor, can be adjusted. When the variable factor is increased, it leads to economies of scale and improved efficiency, resulting in increasing returns to that factor. However, this phenomenon is limited to the short run because in the long run all factors of production can be varied.
Reason (R) is true:
The reason provided states that greater application of the variable factor ensures fully utilization of the fixed factor. This is also true. When more of the variable factor is employed, it allows for better utilization of the fixed factor. For example, if a factory has excess capacity in terms of machinery, hiring more labor can help fully utilize that machinery. By increasing the variable factor, the fixed factor can be used more efficiently, leading to higher productivity and output.
Explanation of the relationship:
Both Assertion (A) and Reason (R) are true. However, Reason (R) is not the correct explanation of Assertion (A). While Reason (R) correctly explains the concept of fully utilizing the fixed factor with the help of the variable factor, it does not explain why increasing returns to a factor are a short run phenomenon. The short run nature of increasing returns to a factor is due to the presence of fixed factors, which cannot be easily changed in the short run. In the long run, all factors can be adjusted, eliminating the phenomenon of increasing returns to a factor.
Conclusion:
In conclusion, both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A). Increasing returns to a factor are a short run phenomenon due to the presence of fixed factors, and greater application of the variable factor ensures fully utilization of the fixed factor.
Assertion (A) is true:
Increasing returns to a factor are indeed a short run phenomenon. In the short run, some factors of production, such as the size of the plant or the capacity of machinery, are fixed and cannot be easily changed. However, the variable factors, such as labor, can be adjusted. When the variable factor is increased, it leads to economies of scale and improved efficiency, resulting in increasing returns to that factor. However, this phenomenon is limited to the short run because in the long run all factors of production can be varied.
Reason (R) is true:
The reason provided states that greater application of the variable factor ensures fully utilization of the fixed factor. This is also true. When more of the variable factor is employed, it allows for better utilization of the fixed factor. For example, if a factory has excess capacity in terms of machinery, hiring more labor can help fully utilize that machinery. By increasing the variable factor, the fixed factor can be used more efficiently, leading to higher productivity and output.
Explanation of the relationship:
Both Assertion (A) and Reason (R) are true. However, Reason (R) is not the correct explanation of Assertion (A). While Reason (R) correctly explains the concept of fully utilizing the fixed factor with the help of the variable factor, it does not explain why increasing returns to a factor are a short run phenomenon. The short run nature of increasing returns to a factor is due to the presence of fixed factors, which cannot be easily changed in the short run. In the long run, all factors can be adjusted, eliminating the phenomenon of increasing returns to a factor.
Conclusion:
In conclusion, both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A). Increasing returns to a factor are a short run phenomenon due to the presence of fixed factors, and greater application of the variable factor ensures fully utilization of the fixed factor.
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?.
Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?.
Solutions for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Increasing returns to a factor is a short run phenomenon.Reason (R): Greater application of the variable factor ensures fully utilization of the fixed factor.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
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