Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, an increase in the price of shovels will result in

Question

Jamar Blanchard

Business

4 July, 14:24

Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, an increase in the price of shovels will result in

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Answers (1)

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Arthur Caldwell · Answer 1

Constant returns to scale.

Explanation:

Returns to scale measures the rate at which output changes in relation to increased input.

In the given scenario each worker must use only one shovel to dig a trench, and shovels are useless without the workers.

So of there is increase in price and reduction in shovel output will reduce. Returns to scale is constant with input