Question:
What are the 3 types of return according to returns to scale?
Author: Hjalmer PedersenAnswer:
1. Increasing returns (economies of scale): output increases more than proportionately to the increase in all inputs 2. Constant returns: output increases proportionately with an increase in all inputs 3. Decreasing returns (diseconomies of scale): output increases less than proportionately to the increase in all inputs
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