Proportionate increase in all factors of production resulting in a more than proportionate increase in output is a case of ___________.

decreasing returns to sale

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constant returns to scale

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increasing returns to scale

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all of the above

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Solution

The correct option is C increasing returns to scale
Increasing returns to scale: If increases in outputs are proportionately more than the increase in quantity of all inputs, returns to scale are said to be increasing. The terms in the Cobb-Douglas function are raised to coefficients greater than 1.

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Similar questions

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

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.

Returns to a factor refers to the resultant increase in the total product when only one factor is increased, keeping all the other factors constant.

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

Q. Increasing returns to a factor are indicated whenever there is increase in total product.

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Proportionate increase in all factors of production resulting in a more than proportionate increase in output is a case of ___________.

The correct option is C increasing returns to scaleIncreasing returns to scale: If increases in outputs are proportionately more than the increase in quantity of all inputs, returns to scale are said to be increasing. The terms in the Cobb-Douglas function are raised to coefficients greater than 1.