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Suppose you are studying the growth rate of production as a function of the growth rate of capital and the quantity of labor within a
Suppose you are studying the growth rate of production as a function of the growth rate of capital and the quantity of labor within a firm. You are using a cross-sectional data set that includes both large and small firms. Suppose further that the underlying theory suggests that production growth rates will increase as quantity of labor increases and then start decreasing past a particular point. Describe how you would model this relationship with the quadratic functional form.
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