Increasing returns to scale suggests that

A. a firm can make a profit by reducing output
B. a firm can make more profit by increasing output
C. as the producer reduces the quantity of raw materials used, the marginal product will double
D. as the producer increases the quantity of raw materials used, the marginal product will fall

Correct Answer:

Option B = a firm can make more profit by increasing output

Explanation

Increasing returns to scale is when the output increases in a greater proportion than the increase in input.