Does this production function, q = 10L 0.5K 0.3, experience increasing, decreasing or constant returns to scale?
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Does this production function, q = 10L 0.5K 0.3, experience increasing, decreasing or constant returns to scale? Decreasing because 0.5 + 0.3 < 1. Increasing because an 80% increase in inputs increases outputs by 100%. Decreasing because a 100% increase in inputs increases outputs by 80%. A and C.
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
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