Q. Which of the following statements describes increasing returns to scale: (Solved)
1. doubling the inputs used leads to double the output.
2. increasing the inputs by 50% leads to a 25% increase in output.
3. increasing inputs by 1/4 leads to an increase in output of 1/3.
4. none of the above.
- c. increasing inputs by 1/4 leads to an increase in output of 1/3.