Assume a Cobb-Douglas production function of the form: q equals 10 Upper L Superscript 0.33 Baseline Upper K Superscript 0.75. What type of returns to scaleLOADING... does this production function exhibit?

Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.

Explanation:

From the question, we have the following restated equation:

Where q is the output, and L and K are inputs

To determine the types of returns to scale, we increase each of L and K inputs by constant amount c as follows:

We can now solve as follows;

Since 0.33 + 0.75 = 1.08 is greater than one, this production function therefore exhibits increasing returns to scale.

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answernaturalistic observation;