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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?

To determine

The distinction between economies of scale, constant returns to scale and diseconomies of scale.

Explanation

The difference between them is with respect to meaning:

Economies of scale: is defined as a phenomenon where the lower costs are achieved with an increase in the production, that is, the organization is able to achieve better results.

That is, the higher the production, lower the cost.

Constant returns to scale: is neither economies of scale, nor diseconomies of scale. That is the output increases and decreases simultaneously with an increase and decrease in input.

Diseconomies of Scale: is opposite to the economies of scale, that is, with an increase in the production, the cost also increases...

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