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Exploring the Relation between Returns to Scale and Pecuniary Economies/Diseconomies
Lila J. Truett and Dale B. Truett
The Journal of Economic Education
Vol. 26, No. 2 (Spring, 1995), pp. 140-149
Published by: Taylor & Francis, Ltd.
Stable URL: http://www.jstor.org/stable/1183369
Page Count: 10
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This article examines the behavior of long-run average cost when the firm knows it faces pecuniary economies or diseconomies of scale and has other than a constant-returns-to-scale production function. The central issue is the conditions under which the scale properties of the production function will or will not dominate the pecuniary effects of changing input prices.
The Journal of Economic Education © 1995 Taylor & Francis, Ltd.