Determine whether the production function exhibits increasing, constant or decreasing returns to...

Question:

Determine whether the production function exhibits increasing, constant or decreasing returns to scale.

{eq}Q = L^{0.5} K^{0.5} {/eq}

Production function:

Production function exhibits the technical nature between two inputs and output. If technology improves, then the output increases with the given inputs like labor and capital remain fixed. It shows that production increases by more amount.

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{eq}Q =L^{0.5}K^{0.5} {/eq}

The power of degree is equal to one that means the sum of components power is one. It shows that as we add...

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Production Function in Economics: Definition, Formula & Example

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Chapter 11 / Lesson 27
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Learn about the production function. Read the production function definition in economics, learn the production function formula. Plus, see graphs and examples.


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