6.17 : תשואות לגודל I

Returns to scale is a long-run concept that refers to the relationship between changes in all inputs and the resulting change in output. It describes how output changes when all inputs are increased proportionately.

When inputs rise, output typically grows, but at varying rates. The firm may experience increasing, decreasing, or constant returns to scale.

Increasing returns to scale happens when a firm's output grows more than the inputs. This means that if inputs are doubled, the output more than doubles.

Specialization is an important reason for increasing returns to scale.

For example, workers in a television manufacturing plant are assigned specific tasks. Some workers may assemble the circuit board, others install the screen, and others package the product. Over time, they become proficient at their assigned tasks. This increases productivity, leading to increasing returns to scale.

The indivisibility of large inputs is another reason for increasing returns to scale. The physical infrastructure, such as factories and warehouses, can only be utilized effectively at a large scale. So, the firm gets the benefits of increasing these inputs only after a certain production level is attained.