Economic Definition of decreasing returns to scale. Defined.
Offline Version: PDF
Term decreasing returns to scale Definition: A given proportionate increase in all resources in the long run results in a proportionately smaller increase in production. Decreasing returns to scale exists if a firm increases ALL resources -- labor, capital, and other inputs -- by 10%, and output increases by less than 10%. You might want to compare increasing returns to scale and constant returns to scale.
« decreasing marginal returns | decreasing-cost industry »
Permalink: https://glossary.econguru.com/economic-term/decreasing+returns+to+scale