Which of the following production funcitons exhibits constant returns to scale?
A.
q = log(KL)
B.
q = K + L
C.
q =
KL0.5
D.
q = KL
Ans. B. q = K + L
Suppose both labour and capital are doubled, the
2K + 2L = 2 (K+L) = 2q
Then, output also doubles
Hence, the function exhibits CRS
Which of the following production funcitons exhibits constant returns to scale? A. q = log(KL) B....
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