Consider the production function Q = 100L.5K.4. Suppose L = 1 and K = 1 so that

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Consider the production function Q = 100L.5K.4. Suppose L = 1 and K = 1 so that Q = 100.
a. If L is increased by 1 percent, that is, to L = 1.01, with capital unchanged, what is the resulting percentage increase in output?
b. Describe the nature of returns to scale for this production function.

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Managerial economics

ISBN: 978-1118041581

7th edition

Authors: william f. samuelson stephen g. marks

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