Under the condition that other conditions remain unchanged, the output changes brought about by the same proportion changes of various production factors in the enterprise. The change of enterprise scale return can be divided into three situations: increasing scale return, constant scale return and decreasing scale return.

The increase of output is greater than the increase of production factors, which is called increasing returns to scale.

F (input l, input k) > input f(L, k) is the mathematical explanation defined above. Income represents a proportional increase, the left formula refers to the output change caused by the increase of capital and labor in proportion to income, and the right formula refers to the output growth.

The left type is greater than the right type, that is, the input ratio of L is increased, and the output growth ratio caused by K is greater than the input, which is the above definition.

Extended data:

Set production function

q=f(K，L)

K is the capital investment of production factors;

L is the labor input of production factors;

Q is the output; The input of capital and labor is increased to λ times (λ remains unchanged) in the same proportion, and the new output is Q'

q'=f(λK，λL)

If: q'=f(λK，λL)>λq=λf(K，L)

It means that the scale income of production function is increasing.

Baidu Encyclopedia-increasing returns to scale