In a production function q = f(x_1, x_2) where the firm produces q output using x_1 of factor 1 and x_2 of factor 2. Now suppose the firm decides to…
CUET UG 2025 — Economics Micro
In a production function q=f(x1,x2) where the firm produces q output using x1 of factor 1 and x2 of factor 2. Now suppose the firm decides to increase the employment level of both the factors t (t > 1) times. then which among the following is correct?
Held on 29 May 2025 · Verified 13 Jul 2026.
Options
- A
f(tx1,tx2)>tf(x1,x2) i.e. constant returns to scale.
- B
f(tx1,tx2)<tf(x1,x2) i.e increasing returns to scale.
- C
f(tx1,tx2)<tf(x1,x2) i.e decreasing returns to scale.
- D
f(tx1,tx2)=tf(x1,x2) i.e decreasing returns to scale.
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