Jim Devine wrote:
In his intro textbook, David Colander proposes two sociological
reasons for diminishing returns to scale:
Would it be clearer if I said that what passes as
increasing/decreasing returns *to scale* is, in fact,
increasing/decreasing *to particular inputs* holding the rest fixed?
Then those stories (and many others one could think of) apply --
because what we usually call "technology" adjusts accordingly to
different proportions between the inputs. Just note that *that* does
not kill constant returns, perfect competition, or general
equilibrium. It's instead an argument for peaceful co-existence.
Julio
