ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Explanation: it is given that when a firm doubles its inputs, then the firm is able to produce three times more output. This means that the firm is experiencing economies of scale. Another name for economies of scale is increasing return to scale.

Detailed explanation-2: -If a firm more than doubles its output by doubling all of its inputs, the firm is said to have increasing returns to scale.

Detailed explanation-3: -The increasing returns to scale(IRS) means that when the inputs are increased by a constant positive magnitude, then there is more than a proportionate increase in the output produced. That is, with IRS, the firms can produce a higher level of output at a lower cost.

Detailed explanation-4: -D) economies of scale. DS (or, Diseconomies of Scale ) refers to a situation when the business expands by doubling the inputs of production, and the cost per unit increases.

Detailed explanation-5: -If the total inputs of a firm are doubles and the total output doubles as well, the firm is experiencing constant returns to scale.