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    Returns to Scale Defined

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    Define returns to scale. Do you think that most
    businesses are increasing, constant, or decreasing
    returns to scale.

    © BrainMass Inc. brainmass.com October 9, 2019, 4:10 pm ad1c9bdddf
    https://brainmass.com/economics/factors-of-production/returns-to-scale-defined-24630

    Solution Preview

    Returns to scale are technical properties of the production function, y = f(x1, x2, ..., xn). If we increase the quantity of all factors employed by the same (proportional) amount, output will increase. The question of interest is whether the resulting output will increase by the same proportion, more than proportionally, or less than proportionally. These three basic ...

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    The expert defines the return to scales.

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