A firm that has increasing returns to scale in the long run does not experience diminishing marginal returns in the short run.

Question

Quizplus · Accepted Answer

A firm can have increasing returns to scale in the long run, which refers to the output increasing more than in proportion to an increase in all inputs, while still experiencing diminishing marginal returns in the short run due to the fixed nature of some inputs in the short run.

A Firm That Has Increasing Returns to Scale in the Long