Percentage change in labour = New quantity of labour-old quantity of labour X 100/1

RETURN TO SCALE

Note the following from the table below

• Total product increase as the scale of production increases
• Increase return occurs from town workers and areas of land to it workers and 20 areas of land.
• The form increases in size when the proportion between factors remains the same that is 1 unit of labour to 5 hecters of land.
• Constant return to scale occurs when the size of the firms change from  6 Workers and 30 hectares of land at these point the size of production and output changes by the same proportion.
• Decreasing returns to scale occurs when there is further expansion in the size of the firm. This means that open increasing lessthan proportionate to the increase to the size of the firms.

NB:Note that increasing returns is explain by economies of scale while decreasing return explain diseconomies of scale.