Margeʹs Hair Salon production function is Q = f(K, L) = K0.5L0.5 where K is the number of hair dryers and L is the number of labour hours she employs. 1. Prove, with the aid of mathematics, the type of returns to scale exhibited by this production function.
Margeʹs Hair Salon production function is Q = f(K, L) = K0.5L0.5 where K is the number of hair dryers and L is the number of labour hours she employs. 1. Prove, with the aid of mathematics, the type of returns to scale exhibited by this production function.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 1.5CE
Related questions
Question
Margeʹs Hair Salon production function is Q = f(K, L) = K0.5L0.5 where K is the number of hair dryers and L is the number of labour hours she employs.
1. Prove, with the aid of mathematics, the type of returns to scale exhibited by this production function.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
At the moment, Marge uses 16 labour hours and 16 hair dryers. Suppose that Marge can use any amount of either input without affecting the market costs of the inputs. If Marge increased her use of labour hours and hair dryers by 10%, how much would her production increase?
Solution
by Bartleby Expert
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning