In a production process if all inputs get tripled, then which of the following statements will follow?
In a production process if all inputs get tripled, then which of the following statements will follow?
I. If output in tripled, then decreasing returns to scale holds.
II. If output gets doubled, then constant returns to scale holds.
III. If output is more than tripled, then increasing returns to scale holds.
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Correct answer: (B) Only III
Explanation
Tripled inputs giving tripled output is constant returns (I wrong), doubled output is decreasing returns (II wrong), and more than tripled output is increasing returns (III correct).