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.

Question

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.

Quizplus · Accepted Answer

In the given production function, q = L^aK^b, the long-run average cost curve will be horizontal if the production function exhibits constant returns to scale. This occurs when the sum of the exponents of the inputs (in this case, a and b) equals 1, indicating that doubling the inputs will double the output, keeping average costs constant.

If a Production Function Is Represented as Q = LaKb,the

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