If a production function exhibits constant returns to scale, doubling all of the inputs
A) more than doubles output due to the catch-up effect.
B) has absolutely no impact on output because output is constant.
C) less than doubles output due to diminishing returns.
D) doubles output.

Question

Quizplus · Accepted Answer

If a production function exhibits constant returns to scale, then doubling all inputs will result in a doubling of output. This is because constant returns to scale means that increasing all inputs by the same proportion will result in an equivalent increase in output. Therefore, option D is the correct answer.

If a Production Function Exhibits Constant Returns to Scale, Doubling