3 What will happen the returns to scale if production function moves from Q =120 L01K0.1 to Q = 240 L0-1K0.9?Select one:a. The value will change to decreasing returns to scaleb. Insufficient informationC. The value will be constant returns to scale.d. There will be no effect on the value for returns to scaleThe following question is based on the production functionQ=80L07K0.3 where the cost of labour is $6 and the cost of capital is $4. Thetotal cost of production is $120.Based on the production function given in the question, what are the returns toscale?Select one:a. Increasingb. Decreasingc. U- Shaped

The cobb Douglas Production function The production function in the long run is Y=A(L,K,N) Y= output…

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What will happen the returns to scale if production function moves from Q = 120 LO1K0.1 to Q= 240 L0.1K0.92 %3D

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.9P

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Question

What will happen the returns to scale if production function moves from Q =
120 L01K0.1 to Q = 240 L0-1K0.9?
Select one:
a. The value will change to decreasing returns to scale
b. Insufficient information
C. The value will be constant returns to scale.
d. There will be no effect on the value for returns to scale
The following question is based on the production function
Q=80L07K0.3 where the cost of labour is $6 and the cost of capital is $4. The
total cost of production is $120.
Based on the production function given in the question, what are the returns to
scale?
Select one:
a. Increasing
b. Decreasing
c. U- Shaped

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