The parameter A re-scales the production function -- allowing us to transform a decreasing returns to scale production function to an increasing returns to scale production function.
Correct Answer:
Verified
Q21: Which of the following are true in
Q22: After a firm makes both short and
Q23: Output price changes cause substitution effects and
Q24: Output supply is more responsive to price
Q25: Suppose GE produces 1 million light bulbs
Q26: After a firm makes short-run adjustments in
Q27: If a firm's labor input response to
Q29: Suppose there are different ways of producing
Q30: After a firm makes both short and
Q31: The production function
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents