Following are different algebraic expressions of the production function. Decide whether each one has constant, increasing, or
Question:
Following are different algebraic expressions of the production function. Decide whether each one has constant, increasing, or decreasing returns to scale.
a. Q 5 75L0.25K0.75
b. Q 5 75A0.15B0.40C0.45
c. Q 5 75L0.60K0.70
d. Q 5 100 1 50L 1 50K
e. Q 5 50L 1 50K 1 50LK
f. Q 5 50L2 1 50K2 g. Based on the answers for the preceding equations, can you make any generalizations about the functional form of a production equation, the relative magnitudes of the coefficients, and the nature of the returns to scale? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Managerial Economics Economic Tools For Today's Decision Makers
ISBN: 9780131860155
7th Global Edition
Authors: Paul G Keat, Philip K Y Young
Question Posted: