When does a production function satisfy | Class 12 Micro Economics Chapter Production and Costs, Production and Costs NCERT Solutions

Question:

When does a production function satisfy decreasing returns to scale? 

Answer:

Decreasing returns to scale (DRS) holds when a proportional increase in all the factors of production leads to an increase in the output by less than the proportion. For example, if both labour and capital are increased by ‘n’ times but the resultant increase in output is less than ‘n’ times, then we say that the production function exhibits

DRS.
F (nL, nK) < n. f (L, K)


Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

  • Read the question carefully and focus on the core concept being asked.
  • Reference examples and data from the chapter when answering questions about Production and Costs.
  • Review previous year question papers to get an idea of how such questions may be framed in exams.
  • Practice answering questions within the time limit to improve your speed and accuracy.
  • Discuss your answers with your teachers or peers to get feedback and improve your understanding.

Comments

Comment(s) on this Question

Welcome to the NCERT Solutions for Class 12 Micro Economics - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 11: When does a production function satisfy decreasing returns to scale? ....