Returns to Scale

Unit Scale of Production Total Returns Marginal Returns

4 (Stage I -
1 1 Labor + 2 Acres of Land 4 Increasing
Returns)
2 2 Labor + 4 Acres of Land 10 6
3 3 Labor + 6 Acres of Land 18 8
10 (Stage II -
4 4 Labor + 8 Acres of Land 28
Constant Returns)
5 5 Labor + 10 Acres of Land 38 10
6 6 Labor + 12 Acres of Land 48 10
8 (Stage III -
7 7 Labor + 14 Acres of Land 56 Decreasing
Returns)
8 8 Labor + 16 Acres of Land 62 6
The data of table 1 can be represented in the form of figure 1

RS = Returns to scale curve

RP = Segment; increasing returns to scale

PQ = segment; constant returns to scale

QS = segment; decreasing returns to scale