Consider the Cobb-Douglas production function F(K, L) = K" L where K and L denote capital and labour respectively, and where a and ß are positive constants. If the production function exhibits increasing returns to scale, which one of the following statements is true? Select one: O a. Returns to each factor are increasing Ob. Returns to at least one factor are increasing O c. Returns to each factor are cecreasing O d. Returns to each factor might be decreasing Oe. None of the above

Consider the Cobb-Douglas production function F(K, L) = K" L where K and L denote capital and labour respectively, and where a and ß are positive constants. If the production function exhibits increasing returns to scale, which one of the following statements is true? Select one: O a. Returns to each factor are increasing Ob. Returns to at least one factor are increasing O c. Returns to each factor are cecreasing O d. Returns to each factor might be decreasing Oe. None of the above

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.9P

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