Question

Determine the returns to scale (increasing, constant, or decreasing) for each of the following production functions....

  1. Determine the returns to scale (increasing, constant, or decreasing) for each of the following production functions.
  1. Q = 2L0.5K0.2  
  2. Q = 200L0.5K0.5   
  3. Q = 10L0.6K0.8  
  4. Q = 500L0.6K0.4
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Homework Answers

Answer #1

Q=A KL

A is constant

If +> 1, then production function shows increasing return to scale (IRS)

If + <1, then production function shows decreasing return to scale (DRS)

If += 1, then production function shows constant return to scale (IRS)

dfsf

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