A production function may exhibit

Question

Quizplus · Accepted Answer

A production function can exhibit constant returns to scale while having diminishing marginal productivities for all inputs, as these concepts refer to different aspects of production. Constant returns to scale means that increasing all inputs by a certain proportion results in an increase in output by the same proportion, while diminishing marginal productivity refers to the decrease in additional output when one input is increased while others are held constant.

A Production Function May Exhibit