Suppose the Production of Mp3 Players Can Be Represented by the Following

question 43

Multiple Choice

Suppose the production of mp3 players can be represented by the following production function: q = L^0.4K^0.4.Which of the following statements is TRUE?

• A) The production function has decreasing returns to scale.
• B) The production function has increasing returns to scale.
• C) The production function has constant returns to scale.
• D) Returns to scale vary with the level of output.

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