to scale is caused by indivisibities of fixed factors which are of minimum size. A Constant return B Decreasing return C Input return D Increasing return
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Increasing returns to scale means that the increase in output is more than proportional to the increase in inputs. The main reason for this is the presence of cost advantages that arise due to expansion in the long run. These are called economies of scale and an there are of two types internal and external. Internal economies of scale arise when the firm expands and the external economies of scale arise when the industry expands in size.
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