Suppose the Production of Mp3 Players Can Be Represented by the Following

Multiple Choice

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

A) The production function has decreasing returns to scale.
B) The production function has increasing returns to scale.
C) The production function has constant returns to scale.
D) Returns to scale vary with the level of output.