Consider a firm, that has production function, f(L,K)=3L^2/3K^1/3. Does this production function...


Consider a firm, that has production function, f(L,K)=3L{eq}^{2/3} {/eq}K{eq}^{1/3} {/eq}. Does this production function satisfy the law of decreasing marginal returns of capital?

Law of Marginal Returns to Input:

The law of diminishing returns to input states that the marginal output of a production process decreases as the amount of a single factor of production is increased incrementally keeping all other factors of production constant.

Answer and Explanation: 1

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  • The marginal product of capital is given by : {eq}\frac{\partial f}{\partial K} = L^{\dfrac{2}{3}} K^{\dfrac{-2}{3}} {/eq}.
  • The marginal product of...

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The Cobb Douglas Production Function: Definition, Formula & Example


Chapter 1 / Lesson 7

Learn the definition of a production function in economics, understand the definition of a Cobb-Douglas production function and its formula, and explore some examples of Cobb-Douglas production function.

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