Suppose that the production function is f(x₁, x₂) = Cxfx2 where a, b, and C are positive constants. a) For what positive values of a, b, and C are there decreasing returns to scale? constant returns to scale? increasing returns to scale? For what positive values of a, b, and C is there decreasing marginal product for factor 1? c) For what positive values of a, b, and C is there diminishing technical rate of substitution? b)
Suppose that the production function is f(x₁, x₂) = Cxfx2 where a, b, and C are positive constants. a) For what positive values of a, b, and C are there decreasing returns to scale? constant returns to scale? increasing returns to scale? For what positive values of a, b, and C is there decreasing marginal product for factor 1? c) For what positive values of a, b, and C is there diminishing technical rate of substitution? b)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 7E
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