Whether the given function shows constant returns to scale or not at v=1

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Use second image for reference, for part b here is referene; The maximum profit is found at the tangency between the production function and the isoprofit line. In other words, the slope of the production function and the slope of the isoprofit line must be the same. This is written as MPL = w where w is the slope of the isoprofit line. Then we get sqrt1 / 2L = w => 1/2w = sqrtL => L*D = 1/4w^2

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Chapter 7, Problem 10E

To determine

Whether the given function shows constant returns to scale or not at v=1

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Use second image for reference, for part b here is referene; The maximum profit is found at the tangency between the production function and the isoprofit line. In other words, the slope of the production function and the slope of the isoprofit line must be the same. This is written as MPL = w where w is the slope of the isoprofit line. Then we get sqrt1 / 2L = w => 1/2w = sqrtL => L*D = 1/4w^2

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