Question

Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: There are increasing return to scale, if output become more than doubles when inputs are doubled. Reason R: Large scale of operation allows managers and workers to specialised in their tasks.

• A. Both A and R are correct and R is the correct explanation of A
• B. Both A and R are correct but R is NOT the correct explanation of A
• C. A is correct but R is not correct
• D. A is not correct but R is correct

Hint:

Increasing returns to scale means output increases more than the increase in inputs. Specialisation and economies of scale are major reasons for it.

Answer 1

The Correct Option is A