--%>

Illustrates the Law of Returns to scale

Illustrates the Law of Returns to scale?

E

Expert

Verified

In the long run all the factor of production is variable and an increase in output is possible by raising all the inputs. The Law of Returns to scale illustrates the technological relationship in between changing scale of output and input. The law of returns of scale describe how a simultaneous and proportionate raise in all the inputs influences the total output. The rise in output may be proportionate, less than proportionate or more than proportionate. If the rise in output is proportionate to the raise in input, this is constant Returns to scale. If this is less then proportionate this is diminishing returns to scale. The rising return to the scale comes first, and after that constant and at last diminishing returns to scale happens.

   Related Questions in Managerial Economics

  • Q : Gains from Exchange Can someone help me

    Can someone help me in finding out the right answer from the given options. Persons or nations that can outperform their competitors in all tasks enjoy: (1) Absolute benefits in all outputs. (2) Relative benefits in all outputs. (3) Comparative benefits in all outputs

  • Q : Forecasting demand what are the

    what are the criteria for good forecasting

  • Q : Explain characteristics of managerial

    Explain the chief characteristics of managerial or business economics.

  • Q : Unexpected increases in national income

    A firm is probably to reduce the number of workers this employs when there are: (i) reductions in the wage rate. (ii) increases in the price of the output. (iii) accumulations of specific training from workers. (iv) technological advances which encourage automation. (

  • Q : Hiring more labor in profit maximization

    When a firm hires an additional worker who adds $100 worth of output daily, and adds $50 daily to the firm’s costs, in that case the firm must: (w) hire more labor. (x) hire less labor. (y) not change its employment of labor. (z) sell off some o

  • Q : Elasticity of demand for labor and type

    The relationship between the elasticity of demand for labor and the elasticity of demand for a specific type of output the labor produces is: (1) uniformly negative. (2) uniformly positive. (3) zero. (4) curvilinear. (5) highly variab

  • Q : Explain the forecasting demand for a

    Explain the forecasting demand for a new product.

  • Q : Illustrate when Price is greater than

    Suppose that price is greater than average variable cost. When a perfectly competitive seller is producing at an output therefore price is $11 and the marginal cost is $14.54, in that case to maximize profits the firm must: w) continu

  • Q : Most exceed the wages or specific

    Firms tend to offer wages which most greatly exceed the wages which workers would earn elsewhere to workers who have: (1) profit-sharing plans. (2) specific training. (3) prenuptial agreements. (4) non-compete clauses in their work contracts. (5) general training.

  • Q : Marginal revenue product and marginal

    When the marginal revenue product of the last worker hired through a large firm is fewer than its marginal resource cost, in that case the firm: (i) increases profits if this lies off a few workers. (ii) operates in a region of decrea