Constant Returns to Scale
Law of Constant Returns to Scale When the scope for division of labour gets restricted, the rate of increase in the total output remains constant, the law of constant returns to scale is said to operate. This law states that the rate of increase/decrease in volume of output is same to that of rate of increase/decrease in inputs.
If the proportional increase in all inputs is equal to the proportional increase in output (production), returns to scale are constant. For instance, if a simultaneous doubling of all inputs results in a doubling of production, then returns to scale are constant. 100% increase in the inputs may raise the production level to 100%.