We have a production function FKL If the Marginal Rate of Su

We have a production function, F(K,L). If the Marginal Rate of Substitution is decreasing and concave, what is the relationship between returns to scale and the marginal production of K and L?

Solution

THe return to scale is directly proportional to marginal production of K and. L in case of increasin curve line . But in case of decreasing and concave graph curve of marginal rate of substitution, there is decrease of marginal production of K and. L.