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1.4 Production, costs and revenue

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Question 33

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 serversSoftware licencesData scientists
1,0001,0001,000305080
1,8001,8001,8004575120
3,0003,0003,00090150240
4,5004,5004,500120200320
9,0009,0009,000240400640

The firm experiences constant returns to scale when it increases its output from:

A

1,0001,0001,000 to 1,8001,8001,800 units.

B

1,8001,8001,800 to 3,0003,0003,000 units.

C

3,0003,0003,000 to 4,5004,5004,500 units.

D

4,5004,5004,500 to 9,0009,0009,000 units.

Markscheme

1.4 Production, costs and revenue Questions

  1. A Level
  2. /Economics
  3. /1.4 Production, costs and revenue

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.

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