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JAMB Economics 1990 Question 10

Question 10

Theory of Production

A situation in which all inputs are doubled and output also doubles is known as

  1. A.constant proportions
  2. B.constant returns
  3. C.increasing returns to scale
  4. D.constant returns to scale
Show the answer and explanation

Answer: D (constant returns to scale)

Explanation

When all inputs change by a proportion and output changes by the same proportion, the firm has constant returns to scale.