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Economics

Question: 1. Following are different algebraic expressions of the production function. Decide whether each one has constant, increasing, or decreasing returns to scale.

a. Q = 75L^0.25K^0.75

b. Q = 75A^0.15B^0.40C^0.45

c. Q = 75L^0.60K^0.70

d. Q = 100 + 50L + 50K

e. Q = 50L + 50K + 50LK

f. Q = 50L² + 50K²

g. Based on the answers for the preceding equations, can you make any generalizations about the functional form of a production equation, the relative magnitudes of the coefficients, and the nature of the returns to scale? Explain.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92598267

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