Acme produces anvils using labor (L) and capital (K) according to the production function Q= f(L,K)=LK with

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Acme produces anvils using labor (L) and capital (K) according to the production function

Q= f(L,K)=LK

with associated marginal products MPL=K, MP_K =L. The price of labor is w=2 and the price of capital is r=1.

Does Acme's production function for anvils exhibit increasing, constant or decreasing returns to scale?

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Managerial Economics

ISBN: 978-0324588866

12th edition

Authors: Mark Hirschey

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Posted Date: Mar 06, 2024 05:28 AM

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Acme produces anvils using labor (L) and capital (K) according to the production function Q= f(L,K)=LK with

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Acmes production function exhibits constant returns to scale Heres why A production function exhibi... View the full answer

Managerial Economics

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