Does the production function exhibit diminishing returns

Reference no: EM13757062

Suppose that the production function for a commodity is given by

Q = 10 (LK)^0.5

where Q is the quantity of output, L is the quantity of labor, and K is the quantity of capital.

(a) Indicate whether this production function exhibits constant, increasing, or decreasing returns to scale.

(b) Does the production function exhibit diminishing returns? If so, when does the law of diminishing returns begin to operate? Could we ever get negative returns?

Calculate Q when L=1and K=1, and L=2 and K=2. Then compare and answer the question about the returns to scale.

Reference no: EM13757062

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