Question

If all inputs are trebled and the resultant output is doubled, this is a case of____________.

• A. Constant returns to scale
• B. Increasing returns to scale
• C. Diminishing returns to scale
• D. Negative returns to scale

Answer 1

Answer: (C)

Diminishing returns to scale

If all inputs are trebled and the resultant output is doubled, this is a case of diminishing returns to scale.

Diminishing return to scale can be defined as a situation when there is an increase in input that causes a less proportional increase in output than the input. It is a type of effect that can be seen in the short-run period when we increase inputs. Hence, option C is correct.