Choose the correct statements in respect of returns to scale.

(A) Decreasing returns to scale occur when a proportional increase in all inputs is less than output.

(B) Constant returns to scale occur when a proportional increase in all inputs is the same as output.

(C) In the long run, factors of production are increased by the same proportion, or factors are scaled up.

(D) Increasing returns to scale occur when a proportional increase in all inputs is less than output.

Choose the correct answer from the options given below:

Option 1 -> Statement (A) is incorrect because decreasing returns to scale occur when output increases by a smaller proportion than the increase in inputs, not when input increase is less than output.

Option 2 -> Statement (A) is incorrect as explained above.

Option 3 -> Statement (A) is incorrect as explained above.

Option 4 -> Statement (B) is correct: constant returns mean proportional input increase equals proportional output increase. Statement (C) is correct: returns to scale is a long-run concept where all factors can be scaled proportionally. Statement (D) is correct: increasing returns occur when output increases more than the proportional increase in inputs.

Hence, Option 4: (B), (C) and (D) only -> Statement (B) correctly defines constant returns to scale where doubling inputs doubles output. Statement (C) correctly identifies returns to scale as a long-run phenomenon where all production factors are scaled up proportionally. Statement (D) correctly describes increasing returns to scale where the proportional increase in output exceeds the proportional increase in inputs (e.g., inputs increase by 10%, output increases by 15%). Statement (A) is incorrect because it reverses the definition of decreasing returns to scale. -> correct