A production function with constant returns to scale for capital alone implies that:

CA Foundation · Business Economics · MTP · June 2024
A production function with constant returns to scale for capital alone implies that:
(A) A. there are increasing returns to scale for all factors of production taken together
(B) B. if all inputs are doubled then output will more than double
(C) C. smaller firms are more efficient than larger firms
(D) D. both A) and B)

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. both A) and B)

Topics: Theory of Production and Cost

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