Answered: Q = A Lx Ky (Quantity, A, Labor,…

Q = A Lx Ky (Quantity, A, Labor, Capital) If A; X; Y are all positive numbers, does the production function exhibit Increasing return to scale, Constant return to scale or Decreasing return to scale?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.5CE

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Question

Q = A L^x K^y

(Quantity, A, Labor, Capital)

If A; X; Y are all positive numbers, does the production function exhibit Increasing return to scale, Constant return to scale or Decreasing return to scale?

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