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27 Feb 2019
F(K,L)= (A aK^(alpha) +(1âa)L^(alpha))^(beta), where α < 1. What condition is necessary for the CES production function to exhibit constant returns to scale? 3. Show that when a CES production function exhibits constant returns to scale, it also exhibits diminishing marginal product for either input.
F(K,L)= (A aK^(alpha) +(1âa)L^(alpha))^(beta), where α < 1. What condition is necessary for the CES production function to exhibit constant returns to scale? 3. Show that when a CES production function exhibits constant returns to scale, it also exhibits diminishing marginal product for either input.
Casey DurganLv2
2 Mar 2019
