Difference between returns to variable factor and returns to scale are as follows:
• The law of Returns to variable factor means the change in physical output when the quantity of one factor is changed, other inputs remain fixed. Returns to scale on the other hand means a change in the physical output when the quantity of all the factors is increased simultaneously at the same proportion.
• The law of variable factors studies the effect of change in one input on the output, whereas Returns to scale studies the effect of change in all inputs on the output.
• The law of variable proportion or Return to a factor is a short-run phenomenon whereas ‘the returns to scale’ is a long-run phenomenon.
• Returns to variable factor take account of the change in factor proportions whereas Returns to scale takes factor proportions to be unchanged.
