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Using a numerical example, explain the difference between constant returns to scale and increasing returns to scale. (5 percent) Complete the following table: (7 percent)
Using a numerical example, explain the difference between constant returns to scale and increasing returns to scale. (5 percent)
Complete the following table: (7 percent)
Capital | Output | Average Product of Capital | Marginal Product of Capital |
0 | 0 | ||
5 | 150 | ||
10 | 320 | ||
15 | 440 | ||
20 | 540 | ||
25 | 610 | ||
30 | 650 |
Does the production process described in the above table exhibit diminishing marginal product of capital? Explain your answer. (3 percent)
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