Returns to Scale
A company has the option of changing all of its inputs. First, a company needs to determine the amount of inputs to use. The scale of a company's growth determines the amount of inputs it will use. An alteration in scale refers to a specified proportion of adjustment in all inputs. For example, a 10% scale growth means the company would use 10% of additional inputs. The manager must evaluate how the difference in scale affects the company's output.
