Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale. A. Q =
Question:
Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale.
A. Q = 0.5X + 2Y + 40Z
B. Q = 3L + 10K + 500
C. Q = 4A + 6B + 8AB
D. Q = 7L2 + 5LK + 2K2
E. Q = 10L0.5K0.3
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A Initially let X Y Z 100 so output is Q 05100 2100 40100 4250 Increasing all inputs by an arbitrary percentage say 2 percent leads to Q 05102 2102 40...View the full answer
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