Question: 3. Suppose that a firm has the production function f(x1, x2) = x1 + x2 2. (a) Find a combination of inputs such that doubling
3. Suppose that a firm has the production function f(x1, x2) = x1 + x2 2. (a) Find a combination of inputs such that doubling the amount of both inputs will more than double the amount of output. 1 (b) Find a combination of inputs such that doubling the amount of both inputs will less than double output. (c) If you were able to find combinations of inputs in both parts (a) and (b), then this production function does not (globally) satisfy the definition of increasing returns to scale, constant returns to scale, or decreasing returns to scale. How can this be?
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