If a firm can double inputs and, thereby, more than double output over the range of output the market demands, it is said to be experiencing
A)decreasing minimum efficient scale
B)increasing returns to scale
C)constant returns to scale
D)decreasing returns to scale
E)increasing long run average cost

Question

Quizplus · Accepted Answer

Increasing returns to scale occur when a firm increases all inputs and output more than doubles; this indicates that the firm is experiencing economies of scale, which result in lower unit costs as output increases.

If a Firm Can Double Inputs And, Thereby, More Than