In given production function q = f(x_1, x_2) what is depicted by f(tx_1, tx_2) < tf(x_1, x_2).

Option 1 -> When inputs are scaled by factor t, output scales exactly by factor t: f(tx₁, tx₂) = tf(x₁, x₂).

Option 2 -> When inputs are scaled by factor t, output increases more than proportionally: f(tx₁, tx₂) > tf(x₁, x₂).

Option 3 -> When inputs are scaled by factor t, output increases less than proportionally: f(tx₁, tx₂) < tf(x₁, x₂).

Option 4 -> This is not a standard economic term for returns to scale.

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Hence, Option 3: Decreasing returns to scale -> The inequality f(tx₁, tx₂) < tf(x₁, x₂) indicates that when all inputs are multiplied by factor t, the output increases by less than factor t. For example, if we double all inputs (t=2), output less than doubles. This diminishing response characterizes decreasing returns to scale, often occurring due to coordination difficulties or resource constraints as production scale increases. -> correct