Question 21
POST_UTME_EKSU
•
2023
•
ECONOMICS
•
objective
The concept of returns to scale in production theory is closely related to the law of diminishing marginal returns. Explain how the law of diminishing marginal returns leads to the concept of returns to scale.
Answer Options
Correct Answer
A.
The law of diminishing marginal returns leads to the concept of returns to scale because as the quantity of a variable input increases, the marginal product of that input decreases.
B.
The law of diminishing marginal returns leads to the concept of returns to scale because as the quantity of a variable input increases, the marginal product of that input increases.
C.
The law of diminishing marginal returns leads to the concept of returns to scale because as the quantity of a variable input increases, the marginal product of that input remains cons\tant.
D.
The law of diminishing marginal returns leads to the concept of returns to scale because as the quantity of a variable input increases, the marginal product of that input decreases and then increases.
Correct Answer
A
Correct Option:
The law of diminishing marginal returns leads to the concept of returns to scale because as the quantity of a variable input increases, the marginal product of that input decreases.
About This Question
This is
Post Utme Eksu
2023
Economics
Question 21.
It is one of the
objective
questions from the
2023
Post Utme Eksu
Economics
examination.