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Constant returns for a Cobb-Douglas production function with two inputs

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1. Constant returns for a Cobb-Douglas production function with two inputs;Suppose that the production function is f(x1, x2)=Cxa1xb2, where a,b,C are positive constants.;a. For what positive values of a,b, and C are there decreasing returns to scale?;b. Constant returns to scale?;C. Increasing returns to scale?;Which answers would u choose?;All C>0 and a+b=1;All C>1 and a+b=1;All C>0 and ab 0 and a+b 0 and a+b>0;All C>0 and a+b>1;All C>1 and a+b>1

 

Paper#21311 | Written in 18-Jul-2015

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