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Increasing returns to scale (view source)

Revision as of 22:50, May 20, 2007

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Increasing returns to scale occur when the percent increase in productivity due to an increase in input is more than the percent the input was increased. For example, if a company increases its input by 50% and their output increases by 75%, it has increasing returns to scale.
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Increasing returns to scale occur when the percent increase in productivity due to an increase in input is more than the percent that all the inputs were increased. For example, if a company increases its input by 50% and their output increases by 75%, it has increasing returns to scale.
    
This can be contrasted with [[decreasing returns to scale]].
 
This can be contrasted with [[decreasing returns to scale]].
    
[[Category:Economics]]
 
[[Category:Economics]]
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