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Unformatted text preview: c. What price will consumers pay? d. What price will suppliers receive? 2. (8) Suppose a production function has the form Q = L .25 K .25 , where Q is the quantity produced, L is the labor input, and K is the capital input. a. What is the technical rate of substitution when L = K = 30? b. Does this production function have increasing, decreasing, or constant returns to scale? Prove your answer using the “t” method....
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 Spring '08
 Nonnenmacher
 Microeconomics, Supply And Demand

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