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Returns to scale will said to be in operation when quantity of:
- a)All inputs are changed
- b)All inputs are changed in already established proportion
- c)All inputs are not changed
- d)One input is changed while quantity of all other inputs remain the same
Correct answer is 'B'. Can you explain this answer?
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Most Upvoted Answer
Returns to scale will said to be in operation when quantity of:a)All i...
Explanation:
Returns to scale is a concept that measures how the output of a production process changes when all inputs are changed. It refers to the relationship between the scale of production and the output produced.
Definition of Returns to Scale:
Returns to scale refers to the rate at which output increases when all inputs are increased by the same proportion.
Types of Returns to Scale:
There are three types of returns to scale:
1. Increasing returns to scale: When the output increases by more than the proportionate increase in all inputs.
2. Constant returns to scale: When the output increases by the same proportion as the increase in all inputs.
3. Decreasing returns to scale: When the output increases by less than the proportionate increase in all inputs.
Answer:
The correct answer is 'B'. When all inputs are changed in already established proportion, returns to scale will be in operation. This means that the rate at which output increases will be the same as the rate at which all inputs are increased.
Explanation of Other Options:
A) All inputs are changed: This option is not correct because it does not specify the proportion in which the inputs are changed.
C) All inputs are not changed: This option is not correct because returns to scale refers to the rate at which output changes when all inputs are changed.
D) One input is changed while the quantity of all other inputs remain the same: This option is not correct because returns to scale refers to the relationship between the scale of production and the output produced when all inputs are changed.
Returns to scale is a concept that measures how the output of a production process changes when all inputs are changed. It refers to the relationship between the scale of production and the output produced.
Definition of Returns to Scale:
Returns to scale refers to the rate at which output increases when all inputs are increased by the same proportion.
Types of Returns to Scale:
There are three types of returns to scale:
1. Increasing returns to scale: When the output increases by more than the proportionate increase in all inputs.
2. Constant returns to scale: When the output increases by the same proportion as the increase in all inputs.
3. Decreasing returns to scale: When the output increases by less than the proportionate increase in all inputs.
Answer:
The correct answer is 'B'. When all inputs are changed in already established proportion, returns to scale will be in operation. This means that the rate at which output increases will be the same as the rate at which all inputs are increased.
Explanation of Other Options:
A) All inputs are changed: This option is not correct because it does not specify the proportion in which the inputs are changed.
C) All inputs are not changed: This option is not correct because returns to scale refers to the rate at which output changes when all inputs are changed.
D) One input is changed while the quantity of all other inputs remain the same: This option is not correct because returns to scale refers to the relationship between the scale of production and the output produced when all inputs are changed.
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Community Answer
Returns to scale will said to be in operation when quantity of:a)All i...
B) is correct.
Bcoz Return to scale is applicable in long run and in long run all factors are changed in already established proportion.
Bcoz Return to scale is applicable in long run and in long run all factors are changed in already established proportion.
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Returns to scale will said to be in operation when quantity of:a)All inputs are changedb)All inputs are changed in already established proportionc)All inputs are not changedd)One input is changed while quantity of all other inputs remain the sameCorrect answer is 'B'. Can you explain this answer?
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