DECREASING RETURNS TO SCALE: A given proportionate increase in all resources in the long run results in a proportionately smaller increase in production. Decreasing returns to scale exists if a firm increases ALL resources -- labor, capital, and other inputs -- by 10%, and output increases by less than 10%. You might want to compare increasing returns to scale and constant returns to scale.

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

DECREASING RETURNS TO SCALE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: January 26, 2023].

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An established method or way of performing an activity that is widely accepted throughout society. Institutions provide the rules, guidelines, and structure needed to carry out day-to-day economic activities, such as production, consumption, and exchange.

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