A digital analytics firm processes data using three inputs: cloud servers, software licences, and data scientists. The table below shows the maximum daily output (in thousands of queries processed) for different combinations of these three inputs:
| Units of output (thousands of queries) | Cloud servers | Software licences | Data scientists |
|---|---|---|---|
| 1,0001,0001,000 | 30 | 50 | 80 |
| 1,8001,8001,800 | 45 | 75 | 120 |
| 3,0003,0003,000 | 90 | 150 | 240 |
| 4,5004,5004,500 | 120 | 200 | 320 |
| 9,0009,0009,000 | 240 | 400 | 640 |
The firm experiences constant returns to scale when it increases its output from:
1,0001,0001,000 to 1,8001,8001,800 units.
1,8001,8001,800 to 3,0003,0003,000 units.
3,0003,0003,000 to 4,5004,5004,500 units.
4,5004,5004,500 to 9,0009,0009,000 units.
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.