On the Geometry of Constant Returns

Abstract

Constant returns to scale, always a simplifying assumption, is often also much more: many important results depend critically on the very special properties of this class of production function. The author provides a unified set of simple proofs for most of the crucial analytical properties of constant returns production and their implications for firm costs. He uses only familiar diagrams and high school geometry, and the proofs are written to be easily understood by college sophomores.

Key Words:

• constant returns
• geometric proof
• A22
• D21

Additional information

Notes on contributors

Geoffrey A. Jehle

Geoffrey A. Jehle is a professor of economics at Vassar College (e-mail: [email protected]).