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

Question

Quizplus · Accepted Answer

The production function exhibits constant returns to scale because when all inputs are multiplied by a constant factor, the output is also multiplied by that same constant factor.

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

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