If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be: | Faculties

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Ram Sharma

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📊 MicroEconomics, Theory and Applications 1

Q. If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

(A) economies of scale
(B) diseconomies of scale
(C) constant returns to scale
(D) increasing average total costs.

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✅ Correct Answer: (C) constant returns to scale

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