RETURNS TO SCALE

Distinction between Laws of Returns and Returns to Scale The laws of returns discussed above are often confused with ‘returns to scale’. The two may be clearly distinguished. By “returns to scale” is meant the behaviour of production or returns...

LAW OF CONSTANT RETURNS

LAW OF CONSTANT RETURNS There can be a situation whee neither the law of diminishing returns nor the law of increasing returns  operates. but there is instead constant return..An industry is subject to the law of constant returns when. whatever the output or scale of...

LAW OF INCREASING RETURNS

LAW OF INCREASING RETURNS Another aspect of the universal law of variable proportions is the law of increasing returns. An industry is subject to the law of increasing returns if extra investment in the industry is following by more than proportionate returns, i.e, if...

Modern Economic Theory

Modern Economic Theory of both developed technology may be able to keep the law of diminishing returns in abeyance. We see from  the Indian experience that improved technology has has ushered in what is known as the ‘green revolution’ and, in a short span...

Importance of the Law of Diminishing Returns

Importance of the Law of Diminishing Returns We have already quoted Cairnes when he says that in the absence of the law of diminishing returns, “The science of political economy would be as completely revolutionized as if human nature itself were altered.”...

Law of Diminishing returns ill a General Form

Law of Diminishing returns ill a General Form The discussion of the (a of diminishing returns in relation to land, since the times of the English Classical economists. has 0 ureJ its real significance. There is nothing peculiar • )lit agriculture for the law to be...