Question

Determine whether returns to scale is decreasing, increasing or constant:
Q = 2K + 3L + KL

Take a shot. Hint: increase both K and L by, say 10%. Does Q rise by more than 10% (increasing), less than 10% (decreasing), or exactly 10% (constant)

Mar 10, 2007

Increasing returns to scale

Nov 5, 2007

increasing

Nov 9, 2011

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