Can a firm have a production function that exhibits increasing returns to​ scale, constant returns to​ scale, and decreasing returns to scale as output​ increases? Discuss. A. No. The functional form of the production technology dictates the type of returns to scales it​ exhibits, and there will only be one of the three types of returns to scale exhibited throughout the range of production possibilities.
B. Yes. At low levels of​ output, increasing marginal returns lead to increasing returns to scale.​ Then, at intermediate levels of​ output, diminishing marginal returns lead to constant returns to scale. And​ finally, for large scale​ operations, logistical and bureaucratic problems can lead to decreasing returns to scale.
C. Yes. At low levels of​ output, specialization leads to increasing returns to scale. Once specialization has been​ exhausted, proportional increases in all inputs lead to constant returns to scale. And​ finally, for large scale​ operations, logistical and bureaucratic problems can lead to decreasing returns to scale
D. No. The functional form of the production technology dictates the type of returns to scale it exhibits. While a production function can exhibit both increasing returns and constant returns to scale at different levels of​ output, increasing returns and decreasing returns to scale are mutually exclusive.