A property of a production function such that scaling all inputs by any positive constant also scales output by the same constant. Such a function is also called homogeneous of degree one or linearly homogeneous. CRTS is a critical assumption of the H-O Model of international trade. Contrasts with increasing returns and decreasing returns.
Related information about constant returns to scale:
- Returns to scale - Wikipedia, the free encyclopedia
If output increases by that same proportional change then there are constant returns to scale (CRS). If output increases by less than that proportional change, ...
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Constant Returns to Scale Defined - A Dictionary Definition of Constant Returns to Scale.
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Definition of constant returns to scale: Production process with neither economies nor diseconomies of scale: the output of the process increases or decreases ...
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Apr 15, 2011... returns to scale and discusses the distinction between increasing returns to scale, decreasing returns to scale, and constant returns to scale.
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A given proportional change in all resources in the long run results in the same proportional change in production. Constant returns to scale exists if a firm ...
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Economies of scale, diseconomies of scale, and constant returns to scale are all related terms that describe what happens as the scale of production increases.
- Returns to scale: Definition from Answers.com
Twice the previous output if there are constant returns to scale (CRS) ... The Cobb-Douglas functional form has constant returns to scale when the sum of the ...
- Balanced Growth under Constant Returns to Scale - JStor
Thus we retain constant returns to scale, but permit continuous sub- stitution of inputs. Our difference equations become nonlinear, but re- main fairly simple.