Economics · Theory of Production
A company producing electronic gadgets finds that when it scales all of its inputs (labor and capital) by 3, its output increases by 4.5 times. What is the firm experiencing?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Diminishing marginal product
- 2Decreasing returns to scale
- 3Increasing returns to scale✓
- 4Constant returns to scale
Correct answer
Increasing returns to scale
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