Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the traditional competitive theory of resource allocation. While most firms exhibit constant or decreasing returns to scale, some firms manufacture products whose technology permits increasing returns to scale that are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the US, by regulated utilities. The author analyses increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sectors and the effects of financing the public sector on the redistribution of income.

Increasing returns to scale is an area in economics that has recently become the focus of much attention. While most firms operate under constant or decreasing return to scale on their relevant range of production, some firms produce goods or services with a technology which exhibits increasing returns to scale at levels of production which are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the U.S., by regulated utilities. In this study, the author analyzes increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sector, and the effects of financing the public sector on the redistribution of income.

Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the traditional competitive theory of resource allocation. While most firms exhibit constant or decreasing returns to scale, some firms manufacture products whose technology permits increasing returns to scale that are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the US, by regulated utilities. The author analyses increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sectors and the effects of financing the public sector on the redistribution of income.

Increasing returns to scale is an area in economics that has recently become the focus of much attention. While most firms operate under constant or decreasing return to scale on their relevant range of production, some firms produce goods or services with a technology which exhibits increasing returns to scale at levels of production which are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the U.S., by regulated utilities. In this study, the author analyzes increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sector, and the effects of financing the public sector on the redistribution of income.