Economics · Theory of Production
A linear homogeneous production function implies that if a firm doubles all factor inputs, its output exactly doubles. Such functions exhibit ___________ and maintain input proportions, reflecting an efficient and scalable production process.
- 1Increasing returns to scale
- 2Constant returns to scale✓
- 3Decreasing returns to scale
- 4Diminishing returns to scale
Correct answer
Constant returns to scale
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