In a Cobb-Douglas production function,the law of diminishing returns does not apply to a variable input if:
A)the power associated with the input is less than one.
B)the sum of the powers of the other inputs is equal to one.
C)the sum of the powers of the other inputs is greater than one.
D)the power associated with the input is equal to or greater than unity.

Question

Quizplus · Accepted Answer

According to the Cobb-Douglas production function, the law of diminishing returns does not apply to a variable input if the power associated with that input is equal to or greater than unity. This is because a power value of 1 or greater indicates that the variable input has a constant productivity rate and will not suffer from diminishing returns.

In a Cobb-Douglas Production Function,the Law of Diminishing Returns Does