Diminishing returns and decreasing returns
Describe what is the difference between diminishing returns and decreasing returns to scale and what kind of returns to scale are possible - observed in healthcare organization? Why? What is the relationship between returns to scale and cost curves? Can you assess the shape of the long-run average cost curve for a hospital organization? You do not need to estimate the cost function, merely, on the basis of your knowledge of healthcare, what do you think the curve looks like and why?