Question: Is it possible that a firms production function exhibits increasing returns to scale while exhibiting diminishing marginal productivity of each of its inputs? To answer

Is it possible that a firm’s production function exhibits increasing returns to scale while exhibiting diminishing marginal productivity of each of its inputs? To answer this question, calculate the marginal productivities of capital and labor for the production of electronics and equipment, tobacco, and primary metal using the information listed in the “Returns to Scale in U. S. Manufacturing” Mini- Case.

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