Discussion
Increasing returns to scale refers to ..................... .
Answer: A
Increasing returns to scale means a more than proportionate increase in output.
Returns to scale compare the change in output with an equal proportional change in all inputs. If doubling every input more than doubles output, returns are increasing, usually owing to specialisation and indivisibilities.
A proportionate increase is constant returns to scale and a less than proportionate increase is decreasing returns to scale. 'Multiproportionate increase' is not a term used in production theory.
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