UPSC CDS GS Economy Questions Part 2

The way total output changes due to change in all inputs in the same proportion is known as law of returns to scale. Returns to scale,in economics, refers to the quantitative change in output of a firm or industry resulting from a proportionate increase in all inputs. If the output increases by less than the proportional change in the input, there are decreasing returns to scale (DRS). If the output increases by more than the proportional change in input, there are increasing returns to scale (IRS).