Consider several production functions below and indicate whether they exhibit constant, increasing or decreasing returns to scale. i) Q = L1/2 K1/2 ii) Q = 2L + 3K iii) Q = L2 iv) Q = L1/2
Consider several production functions below and indicate whether they exhibit constant, increasing or decreasing returns to scale. i) Q = L1/2 K1/2 ii) Q = 2L + 3K iii) Q = L2 iv) Q = L1/2
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 1.5CE
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Question
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Consider several production functions below and indicate whether they exhibit constant,
increasing or decreasing returns to scale.
-
i) Q = L1/2 K1/2
-
ii) Q = 2L + 3K
-
iii) Q = L2
-
iv) Q = L1/2
-
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