Increasing returns to scale: increasing an input by x% creates MORE than an x% increase in output. For example, two construction workers, working together, can build more than twice as fast as one worker working alone).
Decreasing returns to scale: increasing an input by x% creates LESS than an x% increase in output.
Im not sure how to answer your last question. If your only input is labor, then your optimal isoquant will be a "corner" solution -- where the isoquant crosses the labor axis. Ergo, capital input is zero.
Or do you have a problem where you know the amount of labor and you know total output and you are asked to determine the efficient amount of capital used?Hi! Very nice site! Thanks you very much! MD3zIBpWMOlGM
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