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Author Question: A firm has the following production function: q = (L1/3 + K1/3)3 a. Determine the returns to ... (Read 18 times)

mwit1967

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on: Jul 1, 2018
A firm has the following production function:
 
  q = (L1/3 + K1/3)3
 
  a. Determine the returns to scale for this function.
  b. Determine the MRTS.
  c. Determine the Elasticity of Substitution.

Question 2

A monopoly will NOT be able to perfectly price discriminate if
 
  A) obtaining information about each buyer's reservation price is too costly.
  B) demand is very elastic.
  C) demand is very inelastic.
  D) resale is impossible.


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Mholman93

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Reply #1 on: Jul 1, 2018
Answer to Question 1

a. CRTS
b. MRTS = -(L/K)-2/3
c. E = 3/2

Answer to Question 2

A


mwit1967

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Reply 2 on: Jul 1, 2018
Gracias!

mjenn52

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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