# Tag Info

## Hot answers tagged economies-of-scale

5

Excellent question (I am assuming your intended question is "does increasing returns to scale always leads to economies of scale"): The two concepts are related but Returns to scale (RS) is much restrictive than the Economies of scale (ES). The concept of RS is embedded in production function. If $Q=F(K,L)$ then increasing returns to scale simple ...

4

Since my previous answer is quite long, posting here another answer for giving some (non-technical) references with brief description (as suggested by Michael in the comment to previous answer). All the references are from one book: Modern Microeconomics, A Koutsoyiannis As also shown in the example in my previous answer, under certain conditions, RS is ...

3

I think you wanted to ask "Do returns of big scale always imply economies of scale?" The answer is no. Diseconomies of scale exist too. You can get big, get economies of scale, then get even bigger and get diseconomies of scale. It's a reason why even most profitable corporations don't grow like cancer, without bounds.

2

I think what you are looking for is known as overselling.

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