returns to scale


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returns to scale

the relationship between OUTPUT of a product and the quantities of FACTOR INPUTS used to produce it in the LONG RUN. Where, for example, doubling the quantity of factor inputs used results in a doubling of output then constant returns to scale’ are experienced. Where ECONOMIES OF SCALE are present, a doubling of factor inputs results in a more than proportionate increase in output. By contrast, where DISECONOMIES OF SCALE are encountered, a doubling of factor inputs results in a less than proportionate increase in output.
References in periodicals archive ?
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.
Constant returns to scale occurs when there is a built-in rigidity or independence to the operation while economies of scope indicate a degree of flexibility.
Elsewhere in the Asian region, only the top two players in the convenience store business tend to be profitable due to the intensity of the logistics requirements, which drive returns to scale.
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.
This paper shows that there are two main factors that affect the benefits of specialization: returns to scale and nonconvexity of the technology.
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).
In this article, I investigate the size of the returns to scale in aggregate U.
Production function approach to productivity measurement is more advantageous because it can handle the problems arising out of non-separability of inputs and output, non-neutral technical change, variable returns to scale and non-proportionality of input prices of their respective marginal productivity in an explicit manner.
The second assumption of variable returns to scale, which assumes that the fishing boat worked at levels less than its maximum capacity.
The DEA can be conducted under the assumption of constant returns to scale (CRS) or variable returns to scale (VRS)
1%, the TFP effect of innovative adaptation on growth is even smaller than the returns to scale effect from 2001-2011.