Increasing returns to scale suggests that
- a firm can make a profit by reducing output
-
a firm can make more profit by increasing output
- as the producer reduces the quantity of raw materials used, the marginal product will double
- as the producer increases the quantity of raw materials used, the marginal product will fall
The correct answer is: B
Explanation
Increasing returns to scale is when the output increases in a greater proportion than the increase in input.