Returns to Scale

Returns to Scale

Returns to Scale

04/20/19

“How does cost scale with physical production?”

Cost tends to scale with increased production of a particular element. However, the amount of cost of each item might get larger or smaller! The rate of change of each element to increased production is known as the Returns to Scale. This information is vital for the renewable energy industry, as the optimal deployment size will depend on the best return to scale.

Image credit
https://sites.google.com/site/economicsbasics

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s