Concept:Increasing returns to scale means output rises more proportionally than the increase in all inputs.
Explanation:When a firm increases all inputs by a certain percentage, the output increases by a larger percentage.
For example, doubling inputs may more than double the output.
This lowers the average cost of production as output grows.
Therefore, the firm can earn more profit by expanding output.
The statement that matches this idea is option B.
Answer:B. a firm can make more profit by increasing output