Question
Returns to scale is related to
Solution
Returns to scale is related to the long period. Returns to scale refer to the effect of changing the scale of production (i.e., the size of the firm or the level of inputs) on the firm's output. It is analyzed in the long run because in the short run, firms may not be able to adjust all inputs, such as plant size and capital, which is essential for studying the concept of returns to scale.
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