FIGURE 8- 2
-Refer to Figure 8- 2.Decreasing returns to scale occur over the output range
A)Q2 to Q3 only.
B)0 to Q3 only.
C)beyond Q3 only.
D)Q1 to Q2 only.
E)0 to Q1 only.

Question

FIGURE 8- 2 
-Refer to Figure 8- 2.Decreasing returns to scale occur over the output range
A)Q2 to Q3 only. 
B)0 to Q3 only. 
C)beyond Q3 only. 
D)Q1 to Q2 only. 
E)0 to Q1 only.

Quizplus · Accepted Answer

Decreasing returns to scale occur when an increase in inputs results in a less than proportional increase in output. This typically happens beyond a certain level of output, which in this case is beyond Q3.