constant returns

constant returns

  1. 1(in the SHORT RUN) constant returns to the VARIABLE FACTOR INPUT that occur when additional units of variable input added to a given quantity of FIXED FACTOR INPUT generate equal increments in output. With an unchanged price for variable factor inputs, constant returns will cause the short-run unit variable cost of output to stay the same over an output range. See RETURNS TO THE VARIABLE FACTOR INPUT.
  2. (in the LONG RUN) constant returns that occur when successive increases in all factor inputs generate equal increments in output. In cost terms, this means the long-run unit cost of output remains constant so long as factor input prices stay the same. See MINIMUM EFFICIENT SCALE, ECONOMIES OF SCALE.
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They predicted that given the assumptions of identical technology and constant returns to scale, a country would tend to export a commodity which requires the intensive use of the country's relatively abundant factor.
As an example of constant returns to scale, consider U.
Owing to constant returns to scale of the production function, the profits of the firm are equal to zero every period.
Several simplifying assumptions are held throughout, such as that postulating constant returns to scale--the notion that multiplying inputs yields a corresponding multiplication of output.
The maximizing linear programming setting in (2) assumes constant returns to scale technologies.
Output oriented super slacks based model of data envelopment analysis was applied under constant returns to scale (CRS) assumption.
The estimations are within the approach of variable returns to scale with slacks developed by Banker, Charnes, and Cooper (1984) and the constant returns to scale approach developed by Chames, Cooper, and Rhodes (1978).
At the same time, the consensus of a large empirical literature is that aggregate production exhibits constant returns.
In addition to new major landlords looking to maximize their properties' value and smaller long-time property owners looking for constant returns without investing in improvements to their properties, these factors as well as the rezonings have led to a wide variety in asking rents between properties as close as next door to each other.
In its constant returns to scale form, the DEA methodology was developed by Charnes, Cooper and Rhodes in 1978 and further extended to the case of variable returns to scale by Banker, Charnes and Cooper in 1984.
In Stochastic Frontier Analysis Translog and Cobb-Douglass Production Functions are specified, whereas in Data Envelopment Analysis technique, efficiency scores are computed under the assumptions of Constant Returns to Scale as well as Variable Returns to Scale.
Constant returns to scale means that any multiplication of input produces the same multiplied output.

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