If a company doubles all its inputs and discovers that its output is more than doubles, we can say that the company is experiencing
Increasing Marginal utility
Diseconomies of scale
Increasing costs
Constant returns to scale
Increasing returns to scale
Explanation
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Discussions (15)
No! the explanation is not right. Not a corresponding increase bcos its not a constant returns to scale. It is increasing returns to scale bcos doubling of all inputs leads to more than a doubling of output. I.e. Output may increase by a larger proportion than each of the inputs..
Increase in input leads to double increase in output is increasing return to scale. Increasing return to scalep=doubled output>increased input
This is a situation were an increase in input leads to a corresponding increase on output.
yes i agree with u drucktutors,it is a long run phenomenal in which firm can change it factor input,so therefor when input is double output will be more dan double and not double,if u are talking about double dat means u are talking about constant return to scale....
it is obvious that option E is the right answer in the sense that increase returns of scale occurs when more variables are being added to production process, production increases till a stage where output remains constant and at the end diminishing returns sets in.
Thank you guys for your explanation more grace and favour through Christ our lord
When a firm doubles its inputs and finds that its output has more than doubled, this is known as economies of scale
