Why are cobbdouglas production function

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Reference no: EM131101633

Consider the following Cobb- Douglas production for red bean coffee. q=(l^0.2)*(k^0.5)

a. intutively, why are cobb-douglas production function more appropriate representations of reality than, say, linear production functions ?

b. based on the function above, is red bean cofee's business experiencing economies or diseconomies of scale? explain how uou arrived at your answer.

c. if red bean cofee decided to boost labor by 15% and captail by 10%, how much will productivity increase?

d. if red bean cofee wanted to boost productivity by 40% and already knew they were going to increase captail by 20%, how much would they have to increase their labor force to rach this production targer?

Reference no: EM131101633

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