INCREASING MARGINAL RETURNS: In the short-run production of a firm, an increase in the variable input results in an increase in the marginal product of the variable input. Increasing marginal returns typically surface when the first few quantities of a variable input are added to a fixed input. Compare this with decreasing marginal returns. You should also compare this with economies of scale associated with long-run production. See also | short-run production | law of diminishing marginal returns | fixed input | variable input | marginal product | average product | total product | short-run production | long-run production |
