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Production and cost — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsProduction and cost2 Marks
Question
What is meant by returns to scale? State the reasons for increasing returns to scale.
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Answer

When all the inputs are increased simultaneously and in the same proportion, then the resultant increase in output is called returns to scale.

Production on large scale facilitates division of labour and specialisation. This results in increase in productivity.

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