The firm's production function tell you if a twofold (threefold, etc) increase in all inputs increases output
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Question:
The firm's production function tell you if a twofold (threefold, etc) increase in all inputs increases output by less than twofold (less than threefold, etc.). Based on this information answer the following:
a. what is the type of returns of scale that reflects the relationship between output and inputs? why?
b by ISO Quant and ISO Cost Curves determine the optimal combination of inputs (capital & labor), determine the optimal condition, and draw the expansion path for this firm, if its expansion is capital intensive.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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