Examining returns to scale of production function

Reference no: EM1371655

Consider the production function Q=100L^.5K^.4. Suppose L=1 and K=1 so that Q=100

a. If L is increased by 1 percent, that is to L=1.01 with capital unchanged, what is the resulting percentage increase in output?

b. Explain the nature of returns to scale for this production function.

Reference no: EM1371655

Questions Cloud

Explain what federal agency would prosecute crime : Identify the crime and explain what federal agency would prosecute the crime - What punishments could be enforced and provide other real-life examples of people who have committed this crime.

Describe cost-volume-profit analysis : Describe cost-volume-profit analysis with profit-volume analysis and How do they differ

Example of resource allocation optimization : Find out the optimal crude oil allocation in the preceding example if the profit associated with fiber were cut in half, that is, fell to $0.375 per square foot.

Explain one of the changes that occurred after one : Explain one of the changes that occurred after one of the events above. Do you agree with the change and Why or why not and Would you have done something different?

Examining returns to scale of production function : Consider the production function Q=100L^.5K^.4. Suppose L=1 and K=1 so that Q=100. Explain the nature of returns to scale for this production function.

Describe there is a difference between a manager : Describe There is a difference between a manager and a true leader and Organizations tend to change over time and the type of leadership needed will change as well

How do we pick best energy alternative : Chemical process that converts hydrogen and oxygen into electricity and waste heat Oxygen from atmosphere, hydrogen from gas, solid hydrogen storage, or from hydrocarbon fuel Produce few emissions. How do we pick best energy alternative.

What can you find with respect to financial account : Does overvaluation (undervaluation) of As currency reflect a major capital inflow (outflow) into country. What can you find with respect to financial account of balance of payments to substantiate that interpretation.

Output determination in multi-plant business : A firm uses two plants (A and B) to produce the product. The plant's marginal cost functions are given by the following equations:

User Account

All Pages