Q10 of 20 Page 3

What is the difference between returns to an input and returns to scale?


Returns to scale and returns to factor are two important laws of production as they help in understanding the relationship between inputs used and outputs produced.



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Define cost concept. What are the different types of cost?

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What is meant by ‘Short Run’ and ‘Long Run’ in the analysis of a firm?

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Define increasing returns to scale (IRS), constant returns to scale (CRS) and diminishing returns to scale (DRS).

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Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?