The production function Q = 50K^0.25L^0.75 exhibits A)increasing, then diminishing returns to scale. B)increasing returns to scale. C)decreasing returns to scale. D)constant returns to scale. E)negative returns to scale.

Question

Quizplus · Accepted Answer

The sum of the exponents in the production function (0.25 + 0.75) equals 1, indicating constant returns to scale.

The Production Function Q = 50K0.25L0.75 Exhibits

The Production Function Q = 50K^0.25L^0.75 Exhibits