In the Primary Metals industry, it is estimated that the elasticity of
In the Primary Metals industry, it is estimated that the elasticity of output with respect to labor is 0.51 and the elasticity of output with respect to capital is 0.73. These two measures indicate that the primary metals industry is characterized by
A) decreasing returns to scale.
B) constant returns to scale.
C) increasing returns to scale.
D) no returns to scale.
ANSWER
C
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