alleryStart learning →Decreasing returns to scale mean output rises by what, relative to inputs?
ALess than proportional
BMore than proportional
CExactly proportional
DNo change at all
Answer & Solution
Correct answer: A. Less than proportional
When all inputs grow by some percent, output grows by a smaller percent under decreasing returns to scale.
Keep practising Theory of Production
Browse all Theory of Production questions for CA Foundation, or explore more Business Economics topics.
Related questions
With fixed unit input costs, isocost curves have which shape?Widening gaps between isoquants of equal output steps indicate what?Under declining MRTS, an isoquant is what relative to the origin?A line joining tangency points of isoquants and isocosts is called what?At least cost, the ratio of marginal products equals which ratio?The cost-minimising input mix is at tangency of isoquant and which line?With perfect complements, inputs can be combined efficiently only how?If two inputs are perfect substitutes, how does X replace Y?