Question: Consider the Cobb-Douglas production function (, )= 27 ^0.5^0.3. a. Derive a function for the isoquant representing the combination of and that will cause output

Consider the Cobb-Douglas production function (, )= 27 ^0.5^0.3. a. Derive a function for the isoquant representing the combination of and that will cause output to equal 81 units. Display this function if the form = (). b. Mathematically show that this production function has decreasing returns to scale (i.e. scale each input by a constant > 1 and show that this causes output to be scaled by less than ).

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!