What form of return toscale does the production function

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a) Briefly explain the concept of "Return to scale". What form of "Return toScale" does the follwing production function exhibit? Explain

b) Q=f(L,K)=L0.3 K0.7

Suppose a cost minimizing firm wihses to change its scale of production and needs to know the combination of labor and capita to employ. If the firs's total cost outlay is $14. Fin the this combination using the information below and given that the prices of labor and capita are $1 and $3 pert unit repectively.

Q= 0 1 2 3 4 5 6 7 8

TPI=0 11 20 28 35 41 45 46 46.5

TPK=0 24 45 63 78 87 93 96 97

where TPI AND TPK represent total product of labor and total product of capital respectively.

Reference no: EM13238041

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