If output is produced according to Q = K^1/2 + 3L^1/2,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 = K^1/2 + 3L^1/2 exhibits decreasing returns to scale because when both inputs K and L are scaled by a factor t, the output increases by less than t times. This is due to the exponents of K and L being less than 1.

If Output Is Produced According to Q = K1/2

If Output Is Produced According to Q = K^1/2