Difference between revisions of "Decreasing returns to scale"
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For example, if a company increases its input by 50% and their output increases by only 25%, the company has decreasing returns to scale. | For example, if a company increases its input by 50% and their output increases by only 25%, the company has decreasing returns to scale. | ||
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[[Category:Economics]] | [[Category:Economics]] | ||
Latest revision as of 02:54, December 19, 2012
Decreasing returns to scale occur when the percent increase in productivity due to an increase in input is less than the percent all the inputs were increased.
For example, if a company increases its input by 50% and their output increases by only 25%, the company has decreasing returns to scale.