A production function has the property that f( xL, xK) = x2f( L, K) for any positive

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A production function has the property that f( xL, xK) = x2f( L, K) for any positive value of x. What kind of returns to scale does this production function exhibit? If the firm doubles L and K, show that the marginal product of labor and the marginal product of capital also double.

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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