3 Determine the marginal product of capital and labour in the following pro- duction function: Q=5L-2LK +2LK

Question:

3 Determine the marginal product of capital and labour in the following pro- duction function: Q=5L-2LK +2LK - 5K. (i) Do the factors exhibit diminishing returns? (hint - returns to the factors are indicated by the sign of the second derivatives - why?) (ii) What is the nature of returns to scale?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamentals Of Managerial Economics

ISBN: 9781349162253

1st Edition

Authors: Julian Gough, Stephen Hill

Question Posted: