Increasing returns to scale suggests that
ECONOMICS
WAEC 2020
Increasing returns to scale suggests that
- A. a firm can make a profit by reducing output
- B. a firm can make more profit by increasing output
- C. as the producer reduces the quantity of raw materials used, the marginal product will double
- D. as the producer increases the quantity of raw materials used, the marginal product will fall
Correct Answer: B. a firm can make more profit by increasing output
Explanation
Increasing returns to scale is when the output increases in a greater proportion than the increase in input.
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