Kind of returns to scale do production functions exhibit

Assignment Help Business Economics

Reference no: EM13852520

The BlackBerry production function is Q = 2.83L1.52K0.82. Epple et al. (2010) estimate that the production function for U.S. housing is q = 1.38L0.144M0.856, where L is land and M is an aggregate of all other mobile, non-land factors, which we call materials. Haskel and Sadun (2012) estimate the production function for U.K. supermarkets is Q = L0.23K0.1M0.66, where L is labor, K is capital, and M is materials. What kind of returns to scale do these production functions exhibit?

Reference no: EM13852520

Questions Cloud

Find the prices that form an equilibrium : Suppose two firms sell an homogeneous product; they compete in prices. Their respective marginal costs are MC1(q) = 10 and MC2(q) = 20. Find the prices that form an equilibrium (for simplicity and reality, assume that prices are quoted in units no sm..

Compete in prices in homogeneous good market : Suppose three firms compete in prices in an homogeneous good market. Their costs are the same, mc = 10 (marginal cost). Find the equilibrium prices of this game. (Are there many equilibria? If so, notice what all of them have in common).

What is the firms cost function : Gail works in a flower shop, where she produces 10 floral arrangements per hour. She is paid $10 per hour for the first eight hours she works and $15 an hour for each additional hour she works. What is the firm’s cost function? What are its AC, AVC, ..

Minimum acceptable price to the seller : Jennifer buys a piece of costume jewelry for $33 for which she was willing to pay $42. The minimum acceptable price to the seller, Nathan, was $30. Jennifer experiences:

Kind of returns to scale do production functions exhibit : The BlackBerry production function is Q = 2.83L1.52K0.82. Epple et al. (2010) estimate that the production function for U.S. housing is q = 1.38L0.144M0.856, where L is land and M is an aggregate of all other mobile, non-land factors, which we call m..

Show labor market with a binding minimum wage : Using a supply-demand diagram, show a labor market with a binding minimum wage. Now, use the diagram to show those who are helped by the minimum wage, and those who are hurt by the minimum wage.

Interactions between households and firms in simple economy : Explain briefly the various parts of the circular flow diagram representing the interactions between households and firms in a simple economy.

Money demand is greater than the real money supply : If the real money demand is greater than the real money supply, interest rates must rise to reach equilibrium in the money market as institutions sell bonds to obtain more money. The federal government’s control of the money supply, which influences ..

Total abatement cost for both companies under cost effective : Assume that two power plants, Firm 1 and Firm 2, release arsenic in a small urban community that exceeds the emissions standard. To meet the standard, 40 units of SO2 must be abated in total. The two firms face the following abatement costs: Determin..

User Account

All Pages