Let a firm's production function be $Q = 100 ( a L + b K )$. The production function then becomes $Q = 500 ( a L + b K )$. Neutral technological progress has occurred.

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The production function has a constant returns to scale form, which means that a neutral technological progress will only increase productivity without changing the relative proportions of labor and capital. The doubling of the coefficient from 100 to 500 indicates the neutral technological progress. Neutral technological progress is represented by an increase in total factor productivity (TFP) which affects the level of output but not the input-output relationship. Therefore, the production function after technological progress will only differ from the initial production function in terms of a constant factor, which is represented by the increase in output coefficient from 100 to 500.

Let a Firm's Production Function Be Q=100(aL+bK)Q = 100 ( a L + b K )Q=100(aL+bK)

Let a Firm's Production Function Be $Q = 100 ( a L + b K )$