Asked by
Lauren Walker
on Oct 25, 2024
Verified
Does it make sense to consider the returns to scale of a production function in the short run?
A) Yes, this is an important short-run characteristic of production functions.
B) Yes, returns to scale determine the diminishing marginal returns of the inputs.
C) No, returns to scale is a property of the consumer's utility function.
D) No, we cannot change all of the production inputs in the short run.
Returns to Scale
A concept in economics that describes how the output of a firm changes as all its inputs are increased proportionally.
Short Run
A period in economics during which at least one factor of production is fixed, limiting the adjustment processes of the economy.
Production Function
A mathematical representation of the relationship between inputs used in production and the output generated.
- Comprehend the theoretical distinctions between short-term and long-term production functions and the concept of scale returns.
Verified Answer
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Learning Objectives
- Comprehend the theoretical distinctions between short-term and long-term production functions and the concept of scale returns.