Kristen Signs a One-Year Lease for a Mobile Home Owned

Question 17
Multiple Choice

A firm produces one output using one input. When the cost of the input was $3 and the price of the output was $3, the firm used 6 units of input to produce 18 units of output. Later, when the cost of the input was $7 and the price of the output was $4, the firm used 5 units of input to produce 20 units of output. This behavior A) is consistent with WAPM. B) is not consistent with WAPM. C) is impossible no matter what the firm is trying to do. D) suggests the presence of increasing returns to scale. E) suggests the presence of decreasing returns to scale.