Skip to main content

Returns to Scale


The technique of production of a commodityy may be characterized as a function of the required inputsX i :

$$y = f\left( {{x_1},{x_2}, \ldots {x_n}} \right)$$

If all inputs are multiplied by a positive scalar,t, and the consequent output represented astsy, then the value ofs may be said to indicate the magnitude of returns to scale.

This is a preview of subscription content, access via your institution.


  • Kaldor, N. 1966.Causes of the Slow Rate of Economic Growth in the United Kingdom. Cambridge: Cambridge University Press.

    Google Scholar 

  • Marshall, A. 1890.Principles of Economics. 9th (Variorum) edn, London: Macmillan, 1961.

    Google Scholar 

  • Smith, A. 1776.An Inquiry into the Nature and Causes of the Wealth of Nations. London: Methuen, 1961.

    CrossRef  Google Scholar 

  • Sraffa, P. 1925. Sulla relazioni fra costo e quantità prodotta.Annali di Economia 2, 277–328.

    Google Scholar 

  • Sraffa, P. 1926. The laws of returns under competitive conditions.Economic Journal 36, 535–50.

    CrossRef  Google Scholar 

  • Young, A.A. 1928. Increasing returns and economic progress.Economic Journal 38, 527–42.

    CrossRef  Google Scholar 

Download references


Editor information

Editors and Affiliations

Copyright information

© 2008 Palgrave Macmillan, a division of Macmillan Publishers Limited

About this entry

Cite this entry

Eatwell, J. (2008). Returns to Scale. In: Durlauf, S.N., Blume, L.E. (eds) The New Palgrave Dictionary of Economics. Palgrave Macmillan, London.

Download citation