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Suppose that a rm has the production function f (2131, 232) = 2m1 -l l0g3(a:2 + 1) (a) Does the marginal product of factor 1
Suppose that a rm has the production function f (2131, 232) = 2m1 -l l0g3(a:2 + 1) (a) Does the marginal product of factor 1 increase, decrease, or stay constant as the amount of factor 1 increases? Does the marginal product of factor 2 increase, decrease, or stay constant as the amount of factor 2 increases? (b)This production function does not satisfy the denition of increasing returns to scale, constant returns to scale, or decreasing returns to scale. How can this be? Find a combination of inputs such that doubling the amount of both inputs will more than double the amount of output. Find a combination of inputs such that doubling the amount of both inputs will less than double output
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