A firm has two variable factors and a production function f(x₁, x₂)= (2x₁ +4x₂)^1/2.The technical rate of substitution between x₁ and x₂ is constant.

Question

Quizplus · Accepted Answer

The statement mentions that the technical rate of substitution between the two variables is constant, indicating that the firm's production function exhibits constant returns to scale with respect to these two variables.

A Firm Has Two Variable Factors and a Production Function