Which of the following production functions exhibits decreasing returns to scale?
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1 mark, −0.33MicroeconomicsProduction and returns to scaleReturns to scale and homogeneityModerateabout 2 min
UoH 2020 Question 77: Production and returns to scale
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Which of the following production functions exhibits decreasing returns to scale? (A) Q = L^(2/3) K^(2/3) (B) Q = L^(2/3) + K^(2/3) (C) Q = 2/3L + 2/3K (D) Q = min {2/3L, 2/3K}
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What this question tests
This question is on Returns to scale and homogeneity, part of Production and returns to scale in Microeconomics.
How output changes when all inputs scale up, including Euler's theorem and the degree of homogeneity.
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