Calculating production elasticities
Not what you're looking for?
1) Q=75K^.75 L^.25
2) Q=1.4K^.70 L^.60
3) Q=1.4A^.15 B^.40 C^.45
Describe whether constant, increasing, or decreasing returns to scale.
4) For Q=1.4K^.70 L^.60:
Production elasticity of capital (K)
Production elasticity of labor (L)
Purchase this Solution
Solution Summary
Solution describes the steps to determines whether given production functions exhibit increasing, decreasing or constant returns to scale. It also provides step by step method to calculate production elasticities.
Solution Preview
1)Q=75K^.75 L^.25
Sum of exponents=0.75+0.25=1.00
Sum of exponents is equal to 1. It exhibits constant returns to scale.
2)Q=1.4K^.70 L^.60
Sum of exponents=0.70+0.60=1.30
Sum of exponents is greater than 1. It ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.