A Firm Has a Production Function F(x, Y) = 1

Multiple Choice

A firm has a production function f(x, y) = 1.80(x^0.80 + y^0.80) ¹ whenever x > 0 and y > 0. When the amounts of both inputs are positive, this firm has

A) increasing returns to scale.
B) constant returns to scale.
C) decreasing returns to scale.
D) increasing returns to scale if x + y > 1 and decreasing returns to scale otherwise.
E) increasing returns to scale if output is less than 1 and decreasing returns to scale if output is greater than 1.