Question

Difference between return to scale and return to factor

Answer 1

$\huge\underline{\underline{\mathfrak \red{Answer}}}$

❏Returns to a factor and returns to scale are two important laws of production. Both laws explain the relation between inputs and output.

❏On the other hand, returns to scale relate to the long period production function when a firm changes its scale of production by changing one or more of its factors.

Answer 2

Explanation ♥️

★ Returns to a factor studies the behavior of output when more and more units of the variable factor is combined with the fixed factor.

★ Here, scale of production remains constant but factor ratio changes. Whereas the returns to scale studies the behavior of output when the scale of output changes.

$thanking \: you$