differentiate between returns to scale and constant return to scale
LAC is u shaped due to the law of return to scale. In the long run the law of returns to scale operates. i.e. in the beginning, with the increase in variable and factors factors of production, the returns to scale comes in the rate of increasing.that means with the increase in factors of production, the specialization of factors of production becomes possible resulting higher productivity.
My loose definition of constant returns to scale:Constant returns to scale occur when a given increase in output is brought about by the same proportional increase in returns.
The Law of Diminishing Returns is one of the powerful laws in economics. The Law of Economies of Scale is another law of similar importance. [And in that order IMHO]
The principle of diminishing returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
differentiate between returns to scale and constant return to scale
LAC is u shaped due to the law of return to scale. In the long run the law of returns to scale operates. i.e. in the beginning, with the increase in variable and factors factors of production, the returns to scale comes in the rate of increasing.that means with the increase in factors of production, the specialization of factors of production becomes possible resulting higher productivity.
LAC is u shaped due to the law of return to scale. In the long run the law of returns to scale operates. i.e. in the beginning, with the increase in variable and factors factors of production, the returns to scale comes in the rate of increasing.that means with the increase in factors of production, the specialization of factors of production becomes possible resulting higher productivity.
Economies of scale (costs decrease), diseconomies of scale (costs increase), constant returns to scale (costs stay the same)
My loose definition of constant returns to scale:Constant returns to scale occur when a given increase in output is brought about by the same proportional increase in returns.
The Law of Diminishing Returns is one of the powerful laws in economics. The Law of Economies of Scale is another law of similar importance. [And in that order IMHO]
The principle of diminishing returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
why law of diminishing returns is considered a short-run phenomenon?
AFC will decrease
There is no law that requires any person to release their tax returns. The tax returns are private information protected by privacy laws.
Returns to scale refer to a special relationship between output and input. During production, this relationship refers to the connection between the changes that occur with the output and those that began in the input.
Cite and briefly discuss the main determinants of economies of scale.