Two college students share an apartment and split the cost of heating, electricity, and rent. They decide to include one more roommate and divide heat, electricity, and rent costs three ways instead of two ways. If adding the third roommate reduces the amount of money they each pay for utilities and rent each month, this can be described as:

increasing returns to scale.

Explanation:

The returns to scale mean the rate at which there is change in the output when the inputs are changed by a similar factor

While on the other hand, an increasing return to scale refers that if there is an increase in input so by a larger proportion, the output is also increased as compared with the input  

Therefore according to the given situation, since by adding the third roommate,  it declines the amount of money by each one in respect to rent, utilities so it describes the increasing return to scale

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