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Returns to scale and average costs: A simple and generalized proof

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  • Weinschenk, Philipp

Abstract

We provide a simple and generalized proof for the result that increasing [decreasing] returns to scale imply decreasing [increasing] average costs and that constant returns to scale imply constant average costs.

Suggested Citation

  • Weinschenk, Philipp, 2022. "Returns to scale and average costs: A simple and generalized proof," Economics Letters, Elsevier, vol. 221(C).
    • Handle: RePEc:eee:ecolet:v:221:y:2022:i:c:s0165176522003834
    DOI: 10.1016/j.econlet.2022.110909
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    References listed on IDEAS

    as
    1. Hanoch, Giora, 1975. "The Elasticity of Scale and the Shape of Average Costs," American Economic Review, American Economic Association, vol. 65(3), pages 492-497, June.
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    More about this item

    Keywords

    Returns to scale; Average costs;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General

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