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The following table, which is part of a wider question, apparently shows constant returns to scale. My calculations do not seem to show that constant returns to scale occurs.

enter image description here

The correct answer is B.

I can find at least 2 sources claiming that returns to scale occurs when a same change in inputs results in the same quantity change in output

Wikipedia:

If output increases by that same proportional change as all inputs change then there are constant returns to scale (CRS).

EconomicsHelp.org:

Constant returns to scale occurs when increasing the number of inputs leads to an equivalent increase in the output.

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closed as off-topic by Giskard, optimal control, luchonacho, Herr K., BKay Feb 8 '17 at 20:23

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "This question does not meet the standards for homework questions as spelled out in the relevant meta posts. For more information, see our policy on homework question and the general FAQ." – Giskard, optimal control, luchonacho, Herr K., BKay

  • $\begingroup$ What do your calculations show ? $\endgroup$ – keepAlive Feb 8 '17 at 13:53
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You can only judge returns to scale by a simultaneous change in all inputs. Thus, in this case, if you want to test returns to scale, you have to use one of the first three rows and the last row as references.

So, by the definition of returns to scale, you can see that doubling the factors (this is, a move from top row to bottom row) doubles the output. Therefore, it must be the case that there are constant returns to scale.

The other two rows only show that labour is productive. This is, that it's marginal product is positive.

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  • $\begingroup$ meta.economics.stackexchange.com/a/1663/1601 $\endgroup$ – Giskard Feb 8 '17 at 14:27
  • $\begingroup$ great, I can see the logic behind it now $\endgroup$ – user98937 Feb 8 '17 at 14:34
  • $\begingroup$ @denesp But the community has not decided the question is off-topic yet. It might never do. Thanks for the reference anyway. $\endgroup$ – luchonacho Feb 8 '17 at 15:49
  • $\begingroup$ I think the community did decide that this is off-topic as it is a numbers based question about a basic concept with no effort. (OP even had the definition but did not use it.) Of course in the 22 minutes between the posting of the question and the posting of your answer the close vote on this question did not yet conclude. $\endgroup$ – Giskard Feb 8 '17 at 16:09

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