Variable returns to scale in general equilibrium theory once again

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This paper relaxes some assumptions made by Jones (1968) and reconsiders the implications of variable returns to scale (VRS) for the Stolper-Samuelson and Rybczynski theorems. It also analyses for the first time the relationship between factor-returns and factor-supplies at constant commodity-prices. It is shown that the validity of the Rybczynski and/or Stolper-Samuelson theorem is neither necessary nor sufficient for the production possibilities frontier to be locally strictly concave to the origin. Several other new results are derived and an attempt is made to give an intuitive explanation of the most important findings.