Which of the following production functions displays decreasing returns to scale? A) Q = aL + bK² B) Q = aL + bK C) Q = bLK D) Q = cL^.2K^.5 E) Q = cL²K⁵

Name: Which of the following production functions displays decreasing returns to scale? A) Q = aL + bK 2 B) Q = aL + bK C) Q = bLK D) Q = cL .2 K .5 E) Q = cL 2 K 5
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Question

Quizplus · Accepted Answer

In option D, the sum of the exponents of L and K is 0.2 + 0.5 = 0.7, which is less than 1, indicating decreasing returns to scale.

Which of the Following Production Functions Displays Decreasing Returns to Scale