Question

If input prices are constant, a firm with increasing returns to scale can expect: Group of answer choices to hire more and more labor for a given amount of capital, since marginal product increases. to never reach the point where the marginal product of labor is equal to the wage. costs to go up less than double as output doubles. costs to double as output doubles. costs to more than double as output doubles.

Answer 1

in a case where there is a constant price, then the expectation that a firm having an increasing returns to scale is C: costs to go up less than double as output doubles.

• An increasing returns to scale in the domain of economics can be regarded as situation which do take place where there us a high increase in output compare to input when carry out production process.

• In a case whereby, there is a constant input, there the expectation of a firm having increasing returns to scale is that the cost will need to rise, compare to the output.

Therefore, option C is correct.

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