The main properties of a Neoclassical aggregate production function are ________ when all factors are increased proportionally and ________ when any one factor is increased on its own.

Question

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A Neoclassical aggregate production function exhibits constant returns to scale when all factors are increased proportionally because the increase in inputs leads to a proportional increase in output. However, it exhibits diminishing marginal returns when any one factor is increased on its own because the marginal product of each factor eventually decreases as more of that factor is added, holding other factors constant.

The Main Properties of a Neoclassical Aggregate Production Function Are