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Increasing returns to scale. There are three possible types of returns to scale. Law Of Returns To Scale Definition Explanation And Its Types The term diminishing returns to scale refers to scale where output increases in a smaller proportion than the increase in all inputs. Constant return to …

Specifically the average total cost for a given quantity is given by the slope of the line between the origin and the point on the total cost curve that corresponds to that quantity. If a firm has high fixed costs increasing output will lead to lower average costs. Figure Shows A Firm S Marginal…