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If all resources used in the production of a product are increased by 20 percent andoutput increases by 20 percent, then there must be:

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Question:

If all resources used in the production of a product are increased by 20 percent andoutput increases by 20 percent, then there must be:

A.

Economies of scale.

B.

Diseconomies of scale.

C.

Constant returns to scale.

D.

Increasing average total costs.

Answer» c. Constant returns to scale.

Note: The above multiple-choice question is for all general and Competitive Exams in India.