Suppose the production function has the form F (x1, x2, x3) = Axa1 xb2xc3, Where a +

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Suppose the production function has the form
F (x1, x2, x3) = Axa1 xb2xc3,
Where a + b + c > 1. Prove that there are increasing returns to scale. For any t _______ = A (tx1) a (tx2) b (tx3) c = t a+b+c f (x1, x2, x3) > tf (x1, x2, x3).

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Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

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Question Posted: Dec 18, 2015 04:34 AM

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Suppose the production function has the form F (x1, x2, x3) = Axa1 xb2xc3, Where a +

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Intermediate Microeconomics

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