Question

2 points
In case of decreasing returns to
scale, the distance between
subsequent isoquants *
O a) Remain constant
O b) Increase
O c) Decrease
O
d) None of the above​

Answer 1

Answer:

b) increase

Explanation:

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Answer 2

In the case of a reduction in return to the scale, the distance between them the following isoquants are:

• Proper option b) Increase.

• A decrease in return on the scale occurs when the distance between successive isoquants increases.

• For example, OA <AB <BC.

• The decline in returns occurs when the economic downturn is greater than the recession.
• The difficulty of linking multi-industry operations and employee communication problems may contribute to the decline in return on a scale.

• If there is a decrease in the scale, the distance between the pair of isoquants will be longer on the expansion route.
• ST is longer than PS.

• It shows that increasing productivity requires a significant increase in staff numbers and revenue.