Assume a firm is using 10 units of capital and 10 units of labour to produce 10 widgets per hour.By doubling both inputs the result is a doubling of output.This firm is experiencing
A)diseconomies of scale.
B)decreasing returns.
C)increasing costs.
D)economies of scale.
E)constant returns to scale.

Question

Quizplus · Accepted Answer

The firm is experiencing constant returns to scale because doubling both inputs (capital and labor) results in a doubling of output, indicating that output increases proportionally with input increases.

Assume a Firm Is Using 10 Units of Capital and 10