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JAMB Economics 2005 Question 21

Question 21

Theory of Production

Long-run production is called

  1. A.diminishing returns to scale
  2. B.returns to scale
  3. C.external economies of scale
  4. D.economies of scale
Show the answer and explanation

Answer: B (returns to scale)

Explanation

In the long run all inputs change together, and the effect on output is called returns to scale.