Question

A producer desires to minimize his cost
production C = 2L + 5K, where L and K are
inputs, subject to production function Q = LK.
Find out the optimum combination of inputs if
total input is 40 units

Answer 1

Answer:

Suppose the production function is

1

3

Q = 2K + 5L This production function exhibits

O A. decreasing returns to scale

O B. constant returns to scale

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O C. increasing returns to scale *this is the correct answer.*

O D. None of above

E. Cannot be determined from the information given

Step-by-step explanation:

2. A firm has the following linear production function:

q=5L + 2K

a. Does this firm's production function exhibit diminishing marginal returns to labor?

b. Does this production function exhibit diminishing marginal returns to capital?

c. Graph the isoquant associated with q = 20.

d. What is the firm's MRTS between K and L?

e. Does this production technology exhibit decreasing, constant, or increasing returns to scale?

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