What is meant by increasing returns to a factor? What's leads to increasing returns to a factor?
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Increasing returns to a factor can be explained well as follows;
Increasing scale to a factor which fall under the law of increasing returns, is an economic factor that with a given technology,variables factor are increased using other fixed factors aiming at a higher productivity,hence the marginal productivity increases.
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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