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A Firm Has the Production Function F(x1, X2)= (Xb1

Question 11

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.

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