According to chief engineer at zodiac company qalakb where

Reference no: EM13390808

According to the chief engineer at the Zodiac Company, Q=AL^aK^B, 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 firm's 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?

Reference no: EM13390808

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