With increasing returns to scale, isoquants for unit increases in output become:
A) farther and farther apart.
B) closer and closer together.
C) the same distance apart.
D) none of these.

Question

Quizplus · Accepted Answer

With increasing returns to scale, isoquants for unit increases in output become closer and closer together. This means that as output increases, the amount of inputs needed to produce that output decreases. As a result, the isoquants become flatter and closer together as more units of output can be produced with the same increase in inputs.

With Increasing Returns to Scale, Isoquants for Unit Increases in Output