PRC-3 · Chapter 12 · Question 37 of 69
A massive logistics firm doubles its trucks, warehouses, and staff (a 100% increase in inputs). As a result, its delivery capacity 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 results in an exactly equal proportionate increase in total output.
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