Returns to scale is a ______ concept because ______. short-run; it\'s related to
ID: 1094257 • Letter: R
Question
Returns to scale is a ______ concept because ______. short-run; it's related to the law of diminishing marginal returns short-run; it deals with varying the level of one input while holding other inputs constant long-run; a firm can change its output level only in the long run long-run; it refers to changes in all of the firm's inputsReturns to scale is a ______ concept because ______. short-run; it's related to the law of diminishing marginal returns short-run; it deals with varying the level of one input while holding other inputs constant long-run; a firm can change its output level only in the long run long-run; it refers to changes in all of the firm's inputs
Explanation / Answer
The correct answer is:
long-run; it refers to changes in all of the firm's inputs
Here is more information:
Long Run Production - Returns to Scale
In the long run, all factors of production are variable. How the output of a business responds to a change in factor inputs is called returns to scale.
Units of Capital
Units of Labour
Total Output
% Change in Inputs
% Change in Output
Returns to Scale
20
150
3000
40
300
7500
100
150
Increasing
60
450
12000
50
60
Increasing
80
600
16000
33
33
Constant
100
750
18000
25
13
Decreasing
The nature of the returns to scale affects the shape of a business
Numerical example of long run returns to scale
Units of Capital
Units of Labour
Total Output
% Change in Inputs
% Change in Output
Returns to Scale
20
150
3000
40
300
7500
100
150
Increasing
60
450
12000
50
60
Increasing
80
600
16000
33
33
Constant
100
750
18000
25
13
Decreasing
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.