If a company doubles all its inputs and discovers that its output is more than doubles, we can say that the company is experiencing
- Increasing Marginal utility
- Diseconomies of scale
- Increasing costs
- Constant returns to scale
-
Increasing returns to scale
The correct answer is: E
Explanation
A company is said to be experiencing increasing returns to scale when the output increases by a larger proportion than the increase in inputs during the production process.
For example, if the input is increased by 3 times, but output increases by 3.75 times, then the firm or economy has experienced an increasing returns to scale.