In a particular production process,if the quantities of all inputs used are increased by 60%,then the quantity of output increases by 60% as well.This means that
A)the production process cannot be enhanced by technological advances.
B)no mathematical representation of the relevant production function can be formulated.
C)the relevant production function has the limits-to-growth property.
D)the relevant production function has constant-returns-to-scale.

Question

Quizplus · Accepted Answer

The fact that increasing all inputs by 60% results in a 60% increase in output implies that the relevant production function has constant-returns-to-scale. This means that increasing all inputs by a certain percentage leads to an increase in output by the same percentage, indicating that there are no diminishing returns to scale. Therefore, choice D is the correct answer. Choice A is incorrect because there is no information indicating that technological advances cannot enhance the production process. Choice B is incorrect because a mathematical representation of the production function can be formulated as constant-returns-to-scale. Choice C is incorrect because there is no evidence that the relevant production function has the limits-to-growth property.

In a Particular Production Process,if the Quantities of All Inputs