INCREASING RETURNS. In economics, a term used to describe a condition of production in which the application to land of additional capital and labour produces a greater proportionate return. This phenomenon is especially common in the fields of transportation, mining, manufacturing, and electrical generation. For example, the investment of £I,000 in capital and labour to develop a power site at a waterfall might result in a net loss to the investor; a £Io,000 investment might bring in revenue sufficient to cover costs but yield no net profit; while an investment of £ Ioo,000 might yield a net return of 1 o% per annum.
In agriculture, the tendency for returns per unit of investment to grow as investment per acre increases quickly disappears as cul tivation grows intensive. See ECONOMICS ; DIMINISHING RETURNS.