Questions tagged [returns-to-scale]
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Microeconomics exercise on returns to scale
I have an exercise in microeconomics that exhibits the following function
Y = L^(1/2) * (W^(1/2) + K^(1/2))
With L = labor, K = capital, W = water
In a first question, we are asked to find what the ...
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Connection between roundabout production and decreasing returns to scale?
I've heard the statement that roundabout production as in Basu 1995 leads to decreasing returns to scale in production.
What is the connection between the two?
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