A​ Cobb-Douglas production function A. exhibits decreasing returns to scale. B. can exhibit​ constant, increasing, or decreasing

Answer:

The accurate response is C) demonstrates constant returns to scale

Explanation:

The Cobb-Douglas production function can be expressed as:

F(K,L) = A× Kα × Lα-1

Where:

• A = Total factor productivity
• K = Capital
• α = Proportion of income attributed to capital
• L = Labor

This formulation implies that income is allocated among capital and labor holders (workers) in relatively equal shares over time. Like the basic production function F(K,L) = K × L, it exhibits constant returns to scale.