PRC-3 · Chapter 12 · Question 19 of 69
A massive logistics company decides to completely double its fleet of trucks, double its warehouses, and double its staff. Consequently, its total delivery output increases by exactly 100%. This is an example of:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Constant returns to scale
Explanation
Constant returns to scale occur in the long run when a proportionate increase in all inputs (doubling them) results in exactly the same proportionate increase in total output (doubling it).
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