Constant returns to scale

Constant Returns to Scale
Definition of Constant Returns to scale
- A constant ratio between inputs and outputs.

Constant returns to scale No change in long-run average costs when output increases.

constant returns to scale: An attribute of a production function. A production function exhibits constant returns to scale if changing all inputs by a positive proportional factor has the effect of increasing outputs by that factor.

constant returns to scale a situation in which long-run average total cost is constant as the output of a firm changes. (8) ...

A production function with the properties of constant returns to scale and smoothly diminishing returns to individual factors.
Neoliberalism ...

Traditional international trade models do not take market imperfections fully into account, but are based on assumptions that perfect competition and constant returns to scale prevail in every market.

The second block describes the supply side of the economy, and consists of a continuum of firms, indexed , each producing a differentiated good out of labor services hired from the representative household, according to a Constant Returns to Scale ...

See also: Inputs, Perfect competition, Long run, Equilibrium, Decreasing return