**options for the drop down option are constant, increasing, or decreasing Under

Question

**options for the drop down option are constant, increasing, or decreasing

Under what conditions does a Cobb-Douglas production function, ALK exhibit decreasing, constant, or increasing retums to scale? Show how output changes if both inputs are doubled lf the inputs double, then, as a function if q-a. and b, output increases by 2 b Give a rule for determining the returns to scale Let g = a + b. Ifg -1, then the production function exhibits cnt rerns to scale, if g1, then the production function exhibits decreasing returms to scale, and if g>1, then the production function exhibits increasing retuns to scale For example, if g = 1.48, then the production function exhibits returns to scale, and doubling he inputs wil increase output by percent. nter a num enc response using a real number rounded o two decimal places)

Explanation / Answer

Increasing returns to scale because 1.48 is equal to 1.5 . Thus means if we increase output by 1% then output will increase by 1.5%.

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