Point A to C: Constant returns to scale
Point C to E: Increasing returns to scale
Point E to G: Decreasing returns to scale
Explanation:
When inputs are increased by a given proportion, from point A to C, output increases by a constant amount of 100. So, from point A to C, it is called constant returns to scale. From point C to E, output increases at an increasing rate, i.e., 200 and 300. So, from point C to E, it is called increasing returns to scale. From point E to G, output increases at a decreasing rate ,i.e., 100 and 50. So, from point E to G, is called decreasing returns to scale.
3) Identify the regions of increasing, constant, and decreasing returns to scale on the isoquant map shown. (40 poin...
Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale. L, K, and H are inputs and Q is the output in each production function. Initially, set each input = 100 and determine the output. Then increase each input by 2% and determine the corresponding output to see if constant, increasing, or decreasing returns to scale occur. (a) Q = 0.5L + 2K + 40H (b) Q = 3L + 10K +...
For the production function Q = 8L2K2, returns to scale: is increasing. is constant. is decreasing. n be increasing, decreasing, or constant depending on the values of L and
13) Does the production function of Table 7-1 show constant, increasing or decreasing returns to scale if the firm increases the quantity of labor and capital used from (a) 2L and 2K to 4L and 4K? (b) 2L and 4K to 3L and 6k? TABLE 7-1 Production Functiion with two inputs Capital (K) 6 10 24 31 36 40 39 5 12 28 3640 42 40 4 12 28 36 40 40 36 Output (Q) 3 10 23 33 36...
Determine whether each of the production functions below displays constant, increasing, or decreasing returns to scale: Q = 10K0.75L0.25 Q = (K0.75L0.25)2 Q = K 0.75L0.75 Q = K 0.25L0.25 Q = K + L + KL Q = 2K2 + 3L2 Q = KL Q = min(3K, 2L)
a. What can you say about returns to scale? options are: constant returns increasing returns decreasing returns b. Are economies of scale present? Yes or No c. If, in this automobile plant, it takes 32 workers and 92 units of capital to produce 200 automobiles a day, how much labour and capital is involved in producing 300 automobiles a day? _______ workers and _______ units of capital The graph below illustrates a series of short-run average cost curves, numbered AC through AC4,...
For the production function Q = 3L + K, returns to scale: is constant is increasing is decreasing Can be increasing, decreasing, or constant depending on the values of Land K.
Determine whether each of the production functions below displays constant, increasing, or decreasing returns to scale: Q = K + L + KL Q = 2K2 + 3L2 Q = KL Q = min(3K, 2L)
Returns to scale in production: Do the following production function exhibit increasing, constant, or decreasing returns to scale in K and L? (Assume A is some fixed positive number.) (a) Y= K1/3L1/2 (b) Y=AK2/12/3 (c) Y= K1/2L1/2 (d) Y=K+ L (e) Y = K1/2L1/2 + L 2/3TI/3 2/3TI/3
Do the following production functions exhibit increasing, constant, or decreasing returns to scale? (show your work to illustrate the answer), where Q is quantity of output, K is the amount of capital used, and L is the amount of labor used. a) Q=K^1/3 L^2/3 b) Q=7K^1/5 L^3/5 c) Q=4K+8L d) Q=3k^5 L^4
2) Determine whether the following production functions exhibit constant, increasing, or decreasing returns to scale (or none of these) a) Y=K+L^1/3 b) Y= aln(L) + bIn(k)