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Does This Production Function,q = 10L0

Question 123

Multiple Choice

Does this production function,q = 10L0.5K0.3,experience increasing,decreasing or constant returns to scale?


A) Decreasing because a 100% increase in inputs increases outputs by 80%.
B) Increasing because an 80% increase in inputs increases outputs by 100%.
C) Decreasing because 0.5 + 0.3 < 1.
D) A and C.

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