QUESTION 7 If a firm increases all of its inputs by 10 percent and its output increases by 10 percent, then: O A. it is encountering Increasing Returns of scale (IRS) O B. it is encountering decreasing returns of scale (DRS), O C. it is encountering constant returns to scale (CRS) O D. the marginal products of all inputs are falling

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
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QUESTION 7
If a firm increases all of its inputs by 10 percent and its output increases by 10 percent, then:
A. it is encountering Increasing
Returns of scale (IRS)
B. it is encountering decreasing
returns of scale (DRS),
C. it is encountering constant
returns to scale (CRS)
D. the marginal products
of all inputs are falling
Transcribed Image Text:QUESTION 7 If a firm increases all of its inputs by 10 percent and its output increases by 10 percent, then: A. it is encountering Increasing Returns of scale (IRS) B. it is encountering decreasing returns of scale (DRS), C. it is encountering constant returns to scale (CRS) D. the marginal products of all inputs are falling
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