Why increasing, decreasing and negative returns to scale are experienced?
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Increasing returns to scale is when the output increases in a greater proportion than the increase in input. ... For example, if a soap manufacturer doubles its total input but gets only a 40% increase in total output, then it can be said to have experienced decreasing returns to scale.
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1
Answer:
Increasing returns to scale is when the output increases in a greater proportion than the increase in input. ... For example, if a soap manufacturer doubles its total input but gets only a 40% increase in total output, then it can be said to have experienced decreasing returns to scale.
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