-Refer to the diagram above.The firm is experiencing constant returns to scale when output is
A) less than 18 units.
B) between 18 and 21 units.
C) greater than 21 units.
D) greater than 18 units.
E) less than 21 units.

Question

-Refer to the diagram above.The firm is experiencing constant returns to scale when output is
A) less than 18 units. 
B) between 18 and 21 units. 
C) greater than 21 units. 
D) greater than 18 units. 
E) less than 21 units.

Quizplus · Accepted Answer

Constant returns to scale occur when increasing the input results in a proportional increase in output. The diagram indicates this happens between 18 and 21 units.

-Refer to the Diagram Above