“suppose that the production function for a commodity is given by

Suppose that the production function for a commodity is given by                                                                                            Q = 10 (LK)^0.5                                                                            where Q is the quantity of output, L is the quantity of labor, and K is the quantity of capital. ( a) Indicate whether this production function exhibits constant, increasing, or decreasing returns to scale. ( b) Does the production function exhibit diminishing returns? If so, when does the law of diminishing returns begin to operate? Could we ever get negative returns?

NOTE:  P12(a): Calculate Q when L=1and K=1, and L=2 and K=2. Then compare and answer the question about the returns to scale.

P12(b): Given K=1, show the change in Q if L changes from 1 to 2 and 2 to 3. Answer the question about diminishing returns.

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadline.

Click Here to Make an Order Click Here to Hire a Writer