All Questions
5 questions
1
vote
1
answer
232
views
Constant returns and (weak/strict) concavity
Suppose I have a constant returns production function $Q = f(X,Y,Z)$, where $X$, $Y$, and $Z$ are the inputs. Because of constant returns, the Hessian matrix of second-order partial derivatives (f_ij) ...
- 11
0
votes
1
answer
662
views
How to calculate Returns to Scale for Translog production function with two inputs?
I have a double-log (both inputs and output in logarithmic form) translog production function with 2 inputs [with Labour and Capital]. There are two squared terms, one for each of the inputs and there ...
1
vote
0
answers
73
views
How to explain the flattening of the SRAC curve?
I discovered that there is a way that Short-run average cost curve could become 'flatter' instead of shifting. Yet I cannot find an explanation of why and how it can become flatter.
For example, in ...
- 111
2
votes
2
answers
720
views
Returns to scale - Constant Function
Suppose we have a production function $f(z)=2$.
I am asked to determine whether the function exhibits increasing, decreasing, constant or no returns to scale.
For $t>0$, $f(tz)=2$.
I'm not sure ...
- 448
2
votes
1
answer
3k
views
Decreasing Costs, Increasing Returns to Scale, & C''(q)
Given a profit-maximizing firm with production function $f(x_1,x_2)$, I understand that we can formulate a firm's cost function $C(q)$ by using the contingent demand functions $x_1^c$ and $x_2^c$. We ...
- 530