New Study Reveals How Production Efficiency Can Shape Economic Growth đ
The article explores how the shape of a production possibility frontier is related to returns to scale and returns to factors in a Cobb-Douglas production function. It investigates how the frontier changes based on whether returns to scale are constant, increasing, or decreasing, and whether returns to factors are constant, increasing, or decreasing. The main finding is that the production possibility frontier can be curved inwards, curved outwards, or straight depending on the specific conditions of returns to scale and returns to factors.