Returns to scale – Rate at which output increases as inputs are increased proportionately.
Increasing returns to scale – Situation in which output more than doubles when all inputs are doubled. (on a graph isoquants get closer and closer as you move to the right)
Constant returns to scale – Situation in which output doubles when all inputs are doubled.
Decreasing returns to scale – Situation in which output less than doubles when all inputs are doubled. (on a graph isoquants get further and further apart when you move to the right)
