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Returns to Scale

The New Palgrave Dictionary of Economics
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Abstract

The technique of production of a commodity y may be characterized as a function of the required inputs x i :

$$ y=f\left({x}_1,{x}_2,\dots {x}_n\right) $$

If all inputs are multiplied by a positive scalar, t, and the consequent output represented as t s y, then the value of s may be said to indicate the magnitude of returns to scale.

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman

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Eatwell, J. (1987). Returns to Scale. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1480-1

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  • DOI: https://doi.org/10.1057/978-1-349-95121-5_1480-1

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-95121-5

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Chapter history

  1. Latest

    Returns to Scale
    Published:
    13 March 2017

    DOI: https://doi.org/10.1057/978-1-349-95121-5_1480-2

  2. Original

    Returns to Scale
    Published:
    18 November 2016

    DOI: https://doi.org/10.1057/978-1-349-95121-5_1480-1