Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If competitive firms pay each factor its marginal product and the production function has constant returns to scale, the sum of all factor payments will

If competitive firms pay each factor its marginal product and the production function has constant returns to scale, the sum of all factor payments will equal which one

A) total investment

B) total saving

C) total profits

d) total output

Providea complete mathematical argument for your claim.

How does your answer to the above question change if firms have decreasing returns to scale instead? Provide a complete mathematical argument for your claim.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mostly Harmless Econometrics An Empiricist's Companion

Authors: Joshua Angrist

1st Edition

1400829828, 9781400829828

More Books

Students also viewed these Economics questions