Scenario 7.3:
Use the production function: Q = 4L 1/2 K 1/2 .
-Refer to Scenario 7.3. Suppose that your firm decides to double its output to 400. To achieve this level of output the firm will have to:
A) exactly double its inputs.
B) more than double its inputs.
C) less than double its inputs.

Question

Quizplus · Accepted Answer

The production function given does not exhibit increasing or decreasing returns to scale since it's not clearly defined or standard. However, in the context of constant returns to scale (a common assumption when not specified), doubling the output would require exactly doubling the inputs.

Scenario 7.3: Use the Production Function: Q = 4L1/2K1/2

Scenario 7.3: Use the Production Function: Q = 4L^1/2K^1/2