Answer to Question #197306 in Microeconomics for Amahle Ndlovu

Question

The production function of firm A is given by where K and L represent capital and labour respectively. 9. Which of the following statement(s) is/are correct about the production function? [1] The production function has increasing returns to scale. [2] The production function has constant returns to scale. [3] The production function has decreasing returns to scale. [4] The production function has constant economies of scope.

Answer 1

[1] The production function has increasing returns to scale. And [3] The production function has decreasing returns to scale.