Expands on an earlier article which states that economies of scale cannot exist unless the production function exhibits increasing returns to scale. Argues that this is correct only to the extent that the firm faces constant input prices as output expands. Concludes that the assumption that product and input markets are competitive may be…

Argues that the return-to-scale concept is important in explaining to more advanced students how production structures underlie costs. Reviews Christopher Ross Bell's graphical analysis, contending that its argument suggests a variable-returns-to-scale function rather than one exhibiting decreasing returns to scale. Explores classic views and the…