CONSTANT RETURNS TO SCALE: A given proportionate increase in all resources in the long run results in the same proportionate increase in production. Constant returns to scale exists if a firm increases ALL resources -- labor, capital, and everything else -- by 10%, and output also increases by 10%. You might want to compare increasing returns to scale and decreasing returns to scale. Returns to scale are the flip side of economies of scale and diseconomies of scale. Although economies and diseconomies of scale focus on changes in average cost, returns to scale focus on production.

     See also | resources | labor | capital | increasing returns to scale | decreasing returns to scale | diseconomies of scale | economies of scale | long-run average cost | output |

CONSTANT RETURNS TO SCALE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: June 27, 2022].

Additional information on this term can be found at:

WEB*pedia: constant returns to scale

Back to the GLOSS*arama

In the circular flow model, the transfer of goods and services from the business sector to the household sector and the transfer of resource services from the household sector to the business sector. The physical flow is usually illustrated as a counter-clockwise flow for a model with the product markets at the top, resource markets at the bottom, household sector at the left, and business sector at the left. The payment flow moves in the opposite direction.

Complete Entry | Visit the WEB*pedia

Today, you are likely to spend a great deal of time searching for a specialty store seeking to buy either looseleaf notebook paper or a three-hole paper punch. Be on the lookout for cardboard boxes.
Your Complete Scope

This isn't me! What am I?

-- Henry David Thoreau, philosopher

User Feedback