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According to the chief engineer at the Zodiac Company, Q = A

Paper help Economics According to the chief engineer at the Zodiac Company, Q = A

Economics

According to the chief engineer at the Zodiac Company, Q = A

According to the chief engineer at the Zodiac Company, Q = ALaKb, where Q is the output rate, L is t… Show more According to the chief engineer at the Zodiac Company, Q = ALaKb, where Q is the output rate, L is the rate of labor input, and K is the rate of capital input. Statistical analysis indicates that a = 0.8 and b = 0.3. The firms owner claims the plant has increasing returns to scale. a) Is the owner correct? b) If b were 0.2 rather than 0.3, would she be correct? c) Does output per unit of labor depend only on a and b? Why or why not? Please show all work • Show less

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