With respect to the law of returns to scale, which of the following is regarded as a reason for diminishing returns?
Rise in prices of inputs
The correct answer is option 3. A rise in the prices of inputs can lead to diminishing returns to scale because as the cost of inputs increases, it may not lead to proportional increases in output. The other options refer to different concepts not directly related to diminishing returns to scale in production processes.
Similar Questions
In relation to Production Possibilities Curve (PPC), which of the following statements is INCORRECT?
The ________ explains the relation between inputs and outputs in a short period.
In relation to Production Possibilities Curve (PPC), which of the following statements is INCORRECT?
________ shows the relationship between inputs and outputs in the long period.
Which of the following is an INCORRECT match in the context of economics?
(i) Study of an individual firm an industry - macro economics
(ii) Want satisfying capacity of a good - utility
(iii) Exchange of apples with eggs - ceteris paribus
Marginal Rate of Transformation is the slope of ______.
Which branch of economics deals with the study of the economic activities of individual units?
Which of the following is INCORRECT for perfectly competitive markets?
The production possibility curve is a plot between:
Which of the following leads to an outward shift in the supply curve?
Important Questions from Microeconomics
Which of the following statements is NOT correct about the factors that gave rise to the Consumer Movement in India?
The total value of goods and services traded is considered to be the _________ of trade.
Microfinance programmes were first created by Nobel prize winning Economist Muhummad Yunus in what decade?
Which of the following statements is NOT true about the two-sector model?
What happens in case of market equilibrium:
(a) Market demand = market supply
(b) There is no excess supply in the market
