Question map
Not attempted Correct Incorrect ★ Bookmarked
Loading…
Q92 (CDS-II/2014) Economy › Basic Concepts & National Income › Consumer theory basics Answer Verified

The way total output changes due to change in all inputs in same proportion is known as law of

Result
Your answer: —  Â·  Correct: A
Explanation

The law of returns to scale describes how total output changes when all factors of production (inputs) are increased or decreased in the same proportion [1]. This is a long-run production concept because all inputs are variable. There are three distinct stages: Increasing Returns to Scale (IRS), where output increases by a larger proportion than inputs; Constant Returns to Scale (CRS), where output increases by the exact same proportion; and Decreasing Returns to Scale (DRS), where output increases by a smaller proportion [2]. In contrast, the law of diminishing returns (or variable proportions) is a short-run concept that occurs when only one input is varied while others remain fixed. Therefore, the specific phenomenon of changing all inputs proportionally is uniquely defined as the law of returns to scale [1].

Sources

  1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 3: Production and Costs > 3.6 RETURNS TO SCALE > p. 42
  2. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 3: Production and Costs > 3.6 RETURNS TO SCALE > p. 43
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
100%
got it right
✓ Thank you! We'll review this.

SIMILAR QUESTIONS

CAPF · 2019 · Q11 Relevance score: -2.33

According to the Law of Diminishing Returns, in a production function when more and more units of the variable factor are used, holding the antities of a fixed factor constant, a point is reached beyond which

CDS-II · 2013 · Q55 Relevance score: -4.65

The production function of a firm will change whenever :

CDS-I · 2018 · Q120 Relevance score: -5.77

According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to

IAS · 2013 · Q57 Relevance score: -7.73

A rise in general level of prices may be caused by 1. An increase in the money supply 2. A decrease in the aggregate level of output 3. An increase in the effective demand Select the correct answer using the codes given below.