In given production function $q = f (x_1, x_2)$ what is depicted by $f(tx_1, tx_2) < t.f (x_1, x_2)$. |
Constant returns to scale. Increasing returns to scale Decreasing returns to scale Marginal returns to scale. |
Decreasing returns to scale |
The correct answer is Option (3) → Decreasing returns to scale $f(tx_1, tx_2) = t.f (x_1, x_2)$ = Constant Returns to Scale $f(tx_1, tx_2) < t.f (x_1, x_2)$ = Decreasing Returns to Scale $f(tx_1, tx_2) > t.f (x_1, x_2)$ = Increasing Returns to Scale |