Since a large and a small wind turbine have the same installation, operating, and maintenance costs, but a large turbine has four times the generating capacity but costs less than three times as much as a small turbine, the wind power industry faces decreasing returns to scale.

Question

Quizplus · Accepted Answer

The scenario described indicates increasing returns to scale because the cost of a large turbine (less than three times the cost of a small one) for four times the generating capacity suggests that as the scale of production increases, the cost per unit of output decreases.

Since a Large and a Small Wind Turbine Have the Same