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    Decreasing Returns to Scale in the Long Run

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    In the long run, a firm is said to be experiencing decreasing returns to scale if a 10 percent increase in inputs results in:

    an increase in output from 100 to 110.
    a decrease in output from 100 to 90.
    an increase in output from 100 to 105.
    a decrease in output from 100 to 85.

    © BrainMass Inc. brainmass.com October 9, 2019, 8:28 pm ad1c9bdddf
    https://brainmass.com/economics/macroeconomics/decreasing-returns-scale-long-run-152093

    Solution Preview

    When the proportional increase in output is less than the proportional increase in input, the firm is ...

    Solution Summary

    This solution briefly examines the results of an increase in output to identify "decreasing returns to scale." This solution is 83 words.

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