Imagine that tripling the quantity of all inputs in the production, doubles the quantity of output

This statement is referring to the concept of economies of scale in economics, specifically, decreasing returns to scale. Here's a step-by-step explanation:

1. The scenario described is one where all inputs in a production process are tripled. This could mean anything from tripling the number of workers to tripling the amount of raw materials used.

2. The result of this tripling of inputs is a doubling of the output. This means that the production process becomes less efficient as the scale of production increases.

3. This is known as decreasing returns to scale. Decreasing returns to scale occur when a firm increases all of its inputs by a certain factor, but output increases by less than that factor.

4. In this case, the factor is 3 (as all inputs are tripled), but the output only doubles. This means that the firm is experiencing decreasing returns to scale.

5. This could be due to a number of reasons, such as difficulties in managing a larger workforce, or the inefficiencies that come with using more raw materials.

6. In conclusion, the statement is describing a situation where a firm is experiencing decreasing returns to scale in its production process.