Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.

-Refer to Cost of Production.By comparing the two points on the expansion path,we can conclude that this technology exhibits
A) decreasing returns to scale.
B) constant returns to scale.
C) increasing returns to scale.
D) zero returns to scale.

Question

Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.

-Refer to Cost of Production.By comparing the two points on the expansion path,we can conclude that this technology exhibits
A) decreasing returns to scale. 
B) constant returns to scale. 
C) increasing returns to scale. 
D) zero returns to scale.

Quizplus · Accepted Answer

The Answer of Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.

-Refer to Cost of Production.By comparing the two points on the expansion path,we can conclude that this technology exhibits
A) decreasing returns to scale. 
B) constant returns to scale. 
C) increasing returns to scale. 
D) zero returns to scale.

Cost of Production The Following Questions Refer to the Diagram Below. the Wage