Let the Production Function Be Q = AL^aK^b

question 59

Multiple Choice

Let the production function be q = AL^aK^b. The function exhibits constant returns to scale if

• A)a + b = 1.
• B)a + b > 1.
• C)a + b < 1.
• D)Cannot be determined with the information given.

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Definitions:

Satellite Organizations

Entities that operate apart yet are connected to a larger parent organization, often providing supplementary support or services.

Core Firm

A core firm is the central, dominant company in a business network or supply chain that plays a pivotal role in determining operational standards, practices, and dynamics.

Divisionalized Form

An organizational structure where operations are segmented into semi-autonomous divisions, each focused on a particular product line or geographic area.

Departmentalization

The process of dividing an organization into different departments or units, each specializing in certain tasks or functions.