Returns To Scale

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Returns to scale:

  • A long-run concept
  • It shows the proportion of change in output in relation to the proportion of change in input. (What you get out compared with what you put in).
  • The long run curve is made up of lots of short-run curves.

There are different types of return to scale:

  • Increasing returns to scale
  • Constant returns to scale
  • Decreasing returns to scale

They are ALL increasing, but by different amounts.

For example: a 10% increase in input…


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