6. Consider the following Cobb - Douglas utility function: U = χαγβην *Note, it should be assumed that a, B.y > 0 Show that this production function can exhibit increasing returns to scale globally while maintaining diminishing returns for each individual input.
6. Consider the following Cobb - Douglas utility function: U = χαγβην *Note, it should be assumed that a, B.y > 0 Show that this production function can exhibit increasing returns to scale globally while maintaining diminishing returns for each individual input.
Microeconomics A Contemporary Intro
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Chapter7: Production And Cost In The Firm
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![6. Consider the following Cobb - Douglas utility function:
U = χαγβην
*Note, it should be assumed that a, B.y > 0
Show that this production function can exhibit increasing returns to scale globally while maintaining
diminishing returns for each individual input.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0e54264-bbd9-4440-afd7-f2083bf9edac%2F73d98a78-da85-41d9-b9fc-531596ffeeab%2Fqafohvp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6. Consider the following Cobb - Douglas utility function:
U = χαγβην
*Note, it should be assumed that a, B.y > 0
Show that this production function can exhibit increasing returns to scale globally while maintaining
diminishing returns for each individual input.
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