GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Cobb Douglas production function Q = 4 K0.6L 0.3 Exhibit.
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Decreasing returns to scale
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Increasing returns to scale
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Constant returns to scale
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None of the above
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Explanation:
Detailed explanation-1: -We’ve shown that the Cobb–Douglas function gives diminishing returns to both labor and capital when each factor is varied in isolation.
Detailed explanation-2: -Thus, constant returns to scale are reached when internal and external economies and diseconomies balance each other out. A regular example of constant returns to scale is the commonly used Cobb-Douglas Production Function (CDPF).
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