A Firm Has Carefully Estimated Its Production Function to Be

question 45

Essay

A firm has carefully estimated its production function to be: Q = K0.55L0.45,where Q = units of output,K = units of capital,and L = units of labor.What is output elasticity in this case? What sort of returns to scale does the firm face? Explain.

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Definitions:

Acquiescence

The act of agreeing or submitting to something passively, without protest.

Anecdotal Evidence

Evidence based on personal accounts, observations, or stories, rather than on systematic scientific research or statistics.

Case Studies

A research method involving the detailed examination of an individual or group, providing in-depth data and insights into complex issues.

Systematic

Having a methodical plan or process, characterized by order and planning.