OC.exhibits decreasinng reuins to scale nLand M ale less than one. D. always exh

Question

OC.exhibits decreasinng reuins to scale nLand M ale less than one. D. always exhibits constant returns to scale. 0 E. always exhibits decreasing returns to scale. The production function Q-L023K0 10M066 0 A, always exhibits decreasing returns to scale. B. always exhibits constant returns to scale. ° C. exhibits decreasing returns to scale if L, K, and M are less than one. 0 D. always exhibits increasing returns to scale E. exhibits increasing returns to scale if L, K, and M are greater than one.

Explanation / Answer

= .23+.10+.66

=1.06

Total of Value of Elasticity coefficients of L, K and M is greater than 1.

Hence, it exhibits increasing returns to scale.

Right answer is (E)

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