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Give an example of a production function that exhibits increasing returns to scale and...

Question:

Give an example of a production function that exhibits increasing returns to scale and diminishing marginal product of labor at the same time. Prove that the function has these properties.

Production Function:

Production Function shows the relationship between the inputs used in the production with the outputs of the production. The production function is a functional mathematical relationship between the factors and the output of production.

Answer and Explanation: 1

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One example of a production function which shows increasing returns to scale and diminishing marginal product of labor will be :

Y = 10 * L^0.5...

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Returns to Scale in Economics: Definition & Examples

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Chapter 3 / Lesson 71
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Understand the meaning of returns to scale in economics. Learn about increasing returns to scale, constant returns to scale and decreasing returns to scale.


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