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Returns to Scale

Constant retu...

Question

Constant returns to scale (CRS) is a property of production function that holds when a proportional increase in all inputs results in an increase in output by the same proportion.

A

True.

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B

False

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Solution

The correct option is A
True.

True. Constant returns to scale (CRS) is a property of production function that holds when a proportional increase in all inputs results in an increase in output by the same proportion.

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Similar questions

Q. __________ is a property of production function that holds when a proportional increase in all inputs results in an increase in output by the same proportion.

Increasing returns to scale (IRS) holds when a proportional increase in all inputs results in an increase in output by more than the proportion.

Q. __________ holds when a proportional increase in all inputs results in an increase in output by more than the proportion

Q. ________ holds when a proportional increase in all inputs results in an increase in output by less than the proportion.

Q. If all inputs are increased in the same proportion, then it is a case of ___________.
(i) Short run production function
(ii) Long run production function
(iii) Laws of variable proportions
(iv) Laws of returns to scale

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