(Answered) Assume a firms output is a function of capital labor and

Economics

Assume a firm's output is a function of capital, labor, and energy (E ) given by Q = AKα Lβ Eγ

(a) Show that this function is homogeneous and determine the degree of homo- geneity of the function.

(b) What should the relations between α, β, and γ be in order to have a constant returns to scale? Increasing or decreasing returns to scale?

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