Answered: Constant returns to scale (CRS) implies…

Constant returns to scale (CRS) implies variable total factor productivity constant returns to capital increasing marginal products constant returns to labor diminishing marginal products

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Constant returns to scale (CRS) implies
variable total factor productivity
constant returns to capital
increasing marginal products
constant returns to labor
diminishing marginal products

Expert Solution

Step 1

At the marketplace, the term return to scale is used to make economic analysis of the production process such that how much output is produced with per unit of input resource.

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