User:EL JAI Genbour

The difference between Marginal Product and Returns to Scale

befeore starting explaining the difference between these two concepts, lets first define them:

The Marginal Product is a numerical value that denotes the extra output that we get from increasing ONE factor of production (input). in other words; it is the extra output that we get from eache extra unit of input used. The Returns to Scale is a concepte that denotes the impact of a change in all the factors of production (inputs) on the quantity produced of output. In the Return to Scale, three important cases should be distinguished: 1- Constant Return to Scale denotes a case where a change in the amount of inputs leads to a proportionl change in the quantity of output produced. 2- Increasing Return to Scale denotes a case where a change in the amount of inputs leads to a more than proportional change in the quantity of output produced. 3- Decreasing Return to Scale denotes a case where a change in the amount of inputs leads to a less than proportionl change in the quantity of output produced.