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Explain the law of "return to scale"

Explain the law of "return to scale"

Answers

Wilfred
This is a long-term analysis of production it shows by how much total output will change as a result of a change in all factor inputs by same proportion.
Suppose we start from an initial level of input and output.
ret1732019824.png

GRAPHICAL PRESENTATION OF THE RETURNS TO SCALE
Returns to scale may be shown graphically by the distance between successive, multiplelevel- of-output isoquant, that is, isoquant that show levels of output which are multiples of same base level of output, e.g. X ,2X ,3X etc.
ret2732019833.png
ret3732019833.png
Wilfykil answered the question on March 7, 2019 at 05:34

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