What occurs when the sum of exponents is greater than one?

Understand the Problem

The question is asking about the implications of the sum of exponents in a production function context, particularly focusing on how it affects returns to scale. Understanding this requires knowledge of economics, specifically the concepts related to production functions and returns to scale.

More Information

When the sum of exponents is greater than one, it typically relates to functions like the Cobb-Douglas production function, indicating increasing returns to scale. This means that output increases by a larger proportion than the increase in inputs.

Sources

• When the sum of exponents exceeds one - Testbook - testbook.com