Does This Production Function,q = 10L⁰

question 123

Multiple Choice

Does this production function,q = 10L^0.5K^0.3,experience increasing,decreasing or constant returns to scale?

• A) Decreasing because a 100% increase in inputs increases outputs by 80%.
• B) Increasing because an 80% increase in inputs increases outputs by 100%.
• C) Decreasing because 0.5 + 0.3 < 1.
• D) A and C.

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