What are the causes of implementation of law of increasing returns to a factor?
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↔ There are three important reasons for the operation of increasing returns to a factor: 1. Better Utilization of the Fixed Factor: In the first phase, the supply of the fixed factor (say, land) is too large, whereas variable factors are too few.
↔ The increasing returns to a factor is caused by bthe fact that when the utilization of fixed factors are well utilized as the output increases with an increase in variable factors when combined with fixed factors,this therefore leads to an increased returns to a factor.
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