What are the possibilities of returns to scale in production technology?

Three possibilities are there as: technology exhibits (a) constant returns to scale; (b) decreasing returns to scale, and (c) increasing returns to scale. Properly, we have (global) returns to scale. There production function f (x) is demonstrates as:

a. constant returns to scale when f (tx) = tf (x) for all t > 0;

b. decreasing returns to scale when f (tx) < tf (x) for all t > 1;

c. increasing returns to scale when f (tx) > tf (x) for all t > 1;

Posted Date: 9/9/2013 3:16:37 AM | Location : United States

Ask an Expert

Related Discussions:- What are the possibilities of returns to scale in production, Assignment Help, Ask Question on What are the possibilities of returns to scale in production, Get Answer, Expert's Help, What are the possibilities of returns to scale in production Discussions

Write discussion on What are the possibilities of returns to scale in production
Your posts are moderated

Write your message here..

Related Questions

Exceptional suppy cuves, #what is exceptional supply curve #what is exceptional supply curve

Monopoly, What are the causes of emergence of monopoly? What are the causes of emergence of monopoly?

Determine the oldest ideas in economics, Determine the oldest ideas in econ... Determine the oldest ideas in economics One of the oldest ideas in economics is that increases in technology certainly run into natural resource scarcity and so lead to increas

Assignment, Individual Assignment ECO101 - PRINCIPLES OF ECONOMICS elect... Individual Assignment ECO101 - PRINCIPLES OF ECONOMICS electronic submission via Moodle 6 Questions 100 marks (15% of total course) All questions should be attempted. 30-50 w

Labour economics, Much of the supply-side, fiscally conservative economic p... Much of the supply-side, fiscally conservative economic policies of Margaret Thatcher, Ronald Reagan, and even Mike Harris in Ontario were predicated on the belief that high income

Iso-quant - long period analysis, Iso-quant: The dots in the above Fi... Iso-quant: The dots in the above Figure denotes the various combinations of (L, K) that the producer can pick up from form to produce. Among these combinations, there can be t

Derive the optimal contract, Assume that in the market there exist two type... Assume that in the market there exist two types of workers where the principle cannot distinguish types. The two types only differ with respect to the disutility of effort. The dis

Explicit cost, Explicit cost: Explicit costs are payments made by the ... Explicit cost: Explicit costs are payments made by the firm when it purchases or hires factors of production for the production of goods and services. They are also referred t

Slutsky theorm, explain slutsky theorm with graphical representation explain slutsky theorm with graphical representation

Measure of dispersion, formula of range formula of range