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Economies of scale mean that volume of production is increased and there is savings cost. Return to scale means that there is an increase in input and there is a change in productivity. Returns to scale are an important topic from an economics point of view.
Return of scale will increase when the output increases more than the input of production. An example can be said as follows. Suppose a firm ‘y’ has increased input by five times and output has increased by six times then return to scale is on a higher side. When a student asks for returns to scale homework help to myhomeworkhelp.com, real life examples will be given in the assignment.
Returns of scale can be diminishing when the input increases but there is no corresponding increase in output, Suppose a firm ‘x’ has increased input by seven times and output has increased by six times then return to scale is on a lower side.
Example to return to scale
There was a shop that was into the small catering business, and they had eight employees, and they were serving 250 clients. The owner added two more workers are taking the total number of employees to 10. In this case, the input has been increased by 25%.
The hotel sales grew after the introduction of two workers, and they were able to serve 320 customers in a week. And that meant an output increase of 28%. So in the example above input increased but output was more than input and returns to scale positive. We would give more examples like this in our writing when student seeks returns to scale homework help.
Constant return to scale
The constant returns to scale are also explained in the returns to scale assignment help. This means that when an input is increased by ‘x’ factor a corresponding increase of output happens by ‘x’ factor. There is no change in the output and input percentage and hence the term constant.
Assume that a company uses four machines and has four labors and the output has been 28 units and the company decides to increase the labor to 5 labors, and five machines are used to increase productivity. If the output is 38 units the value of output is constant to the value of the input, and then one can infer that economies to scale are constant. We would cover these examples using graph and diagrams so that it would benefit students seeking returns to scale homework help.
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