Pregunta
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If you double the number of workers and output doubles, you are experiencing…
a) constant returns to scale.
b) increasing returns to scale.
c) decreasing returns to scale.
d) the Law of Increasing Returns.

Ask by Reeves Deleon. in the United States
Mar 24,2025

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You are experiencing constant returns to scale.

Solución

  1. Let the original number of workers be and original output be .
  2. When the number of workers is doubled, we have .
  3. According to the problem, output doubles as well, so the new output is .
  4. We compare the change in inputs to the change in output. Since doubling input (workers) leads to doubling output:
  5. This proportional change in output relative to the input is the definition of constant returns to scale.
Thus, the correct answer is:
a) constant returns to scale.

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The Deep Dive

You’re experiencing constant returns to scale! This means that when you double your inputs (in this case, the number of workers), your output also doubles. It’s a sweet spot in production where efficiency remains steady and proportional, just like if you were baking cookies and decided to double the recipe—you’re going to get exactly twice as many cookies!
In real-world scenarios, many businesses aim for constant returns to scale to ensure sustainable growth. For instance, a bakery that expands its workforce but also scales its resources, such as ovens and ingredients, will likely maintain efficiency. This allows them to meet increased demand without compromising quality, making it a win-win situation for both the business and its customers!

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