Returns to scale. (8 points) (a) (4 points) The production function is given by Q(L, K) = L + L 1 3...

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Returns to scale. (8 points) (a) (4 points) The production function is given by Q(L, K) = L + L 1 3 K 2 3 + 2K + 5. Does this function exhibit increasing, decreasing, or constant returns to scale? (b) (4 points) Two isoquants corresponding to a firm’s Cobb-Douglas technology are drawn below. The lower isoquant indicates production of 70 units and the higher isoquant indicates production of 100 units. Does this technology exhibit increasing, constant, or decreasing returns to scale? Explain.

Robert · Accepted Answer

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Returns to scale. (8 points) (a) (4 points) The production function is given by Q(L, K) = L + L 1 3 K 2 3 + 2K + 5. Does this function exhibit increasing, decreasing, or constant returns to scale? (b)...

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