Multiple Choice
A firm has the production function f(x1, x2) = (xb1 . xb2) c, where b > 0 and c > 0.This firm will have
A) increasing returns to scale if and only if 2b + c > 1.
B) increasing returns to scale if and only if bc > 1.
C) increasing returns to scale if and only if b + c > 1.
D) constant returns to scale if and only if c = 1.
E) constant returns to scale if and only if b = c.
Correct Answer:

Verified
Correct Answer:
Verified
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