Advertisements
Advertisements
प्रश्न
When does a production function satisfy decreasing returns to scale?
टिप्पणी लिखिए
उत्तर
Decreasing returns to scale (DRS) holds when a proportional increase in all the factors of production leads to an increase in the output by less than the proportion. For example, if both labour and capital are increased by ‘n’ times but the resultant increase in output is less than ‘n’ times, then we say that the production function exhibits DRS.
Algebraically, DRS exists when
f(nL, nK) < n. f(L, K)
shaalaa.com
Returns to Scale
क्या इस प्रश्न या उत्तर में कोई त्रुटि है?
