Illustrate what is output elasticity in this case

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Calculating output elasticity in the given case

A firm has carefully measured its production function, and thinks that it can be approximated by:

Q = K^0.55*L^0.45, where Q = units of output, K = units of capital, and L = units of labor.

a. What is output elasticity in this case?

b. What sort of returns to scale does the firm face? Explain.

 

Reference no: EM1327351

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