(a)

(b)

(c)

-Refer to Exhibit 9-3. Which graphs shows a cost function for a Cobb-Douglas production function with decreasing returns to scale?
A) (a)
B) (b)
C) (c)

Question

(a)
  
(b)
  
(c)
 
-Refer to Exhibit 9-3. Which graphs shows a cost function for a Cobb-Douglas production function with decreasing returns to scale?
A) (a) 
B) (b) 
C) (c)

Quizplus · Accepted Answer

Graph (c) shows a cost function that initially decreases at a decreasing rate and then increases, which is characteristic of a production function with decreasing returns to scale. In a Cobb-Douglas production function with decreasing returns to scale, as input quantities increase, output increases but at a decreasing rate, leading to higher costs per unit of output as production expands.

(A) (B)(C)-Refer to Exhibit 9-3. Which Graphs Shows a Cost Function