Show That Increasing Returns to Scale Can Co-Exist with Diminishing

question 97

Essay

Show that increasing returns to scale can co-exist with diminishing marginal productivity.To do so,provide an example of a production function with IRTS and diminishing marginal returns.

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Definitions:

Security Agreement

A contract that grants a lender a security interest in an asset, which serves as collateral for a loan.

Creditor

A person or organization to whom money is owed by a debtor.

Consumer Goods

Consumer goods are products purchased and used by consumers for personal or household purposes, including items such as food, clothing, and electronics.

Safeco Corporation

A major American insurance company that provides a variety of personal insurance products including auto, home, and liability insurance.