If a Production Function Is Represented as Q = L^aK^b,the

question 80

Multiple Choice

If a production function is represented as q = L^aK^b,the long-run average cost curve will be horizontal as long as

• A) a + b = 0.
• B) a + b = 1.
• C) q > 0.
• D) L = K.

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Definitions:

Margin

The difference between the selling price of a product and its cost, expressed as a percentage of the selling price, indicating the profitability of the product.

Investment Opportunity

An option for investing capital with the expectation of achieving a return, often evaluated based on potential risks and rewards.

Return On Investment

A financial ratio measuring the profit earned on an investment relative to its cost, indicating the efficiency of the investment.

Turnover

The rate at which inventory or assets are replaced through sales or use within a given period.