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The law of Increasing Returns means
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- increasing cost
- Decreasing cost
- increasing production
- increasing income
- increasing cost
Correct Option: B
Increasing returns mean lower costs per unit just as diminishing returns mean higher costs. Thus, the law of increasing return signifies that cost per unit of the marginal or additional output falls with the expansion of an industry. As more and more units of the commodity are produced, the cost per unit goes on steadily falling. Besides, the return is more than proportionate.
