What Are the Causes of Increasing Returns to a Factor?

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Solution

The causes of increasing returns to a factor are as follows:

Complete utilisation of the fixed factor

Better coordination between factors

Division of labour and increase in efficiency of variable factors

Also read:

Total Product Average Product and Marginal Product

Meaning of Demand and Factors Affecting Demand

Law of Variable Proportion

The Law of Diminishing Marginal Product and the Law of Variable Proportions

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Similar questions

Giving reasons state the following statements whether true or false:-

(i) When there are diminishing returns to a factor total product always decreases

(ii) Total product will increase only when marginal product increases

(iii) Increase in total product always indicate that there are increasing reaturns to a factor

(iv) When there are diminishing returns to a factor, both always falls.

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