If output is produced according to Q = (KL)^3/4,then this production process exhibits: A) increasing returns to scale. B) decreasing returns to scale. C) first increasing and then decreasing returns to scale. D) constant returns to scale. E) first decreasing and then increasing returns to scale.

Question

Quizplus · Accepted Answer

The production function Q = (KL)^{^3/4} exhibits increasing returns to scale because all inputs (K, L, U, P, S) are raised to a power greater than 1 when combined, indicating that a proportional increase in all inputs will lead to a more than proportional increase in output.

If Output Is Produced According to Q = (KL)3/4,then This

If Output Is Produced According to Q = (KL)^3/4,then This