Ayushi Asked a Question
August 12, 2020 6:58 pmpts 30 pts
2. In a production process, the input combination has 30 per cent of fixed assets, 40 per cent raw materials and 10 per cent labour. The quantity of all other inputs except fixed assets has been doubled. The productlon process would be subjected to (1 Retums to scale (2) Law of variable proportions (3) Decreasing returns (4) Increasing returns
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  • Nidhi taparia Best Answer
    Option (2) is right. This is because only the variable factors (raw materials and labour) are being varied. Fixed factor is constant. Returns to scale accrue when all factors are...
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