Return to scale for Cobb-Douglas production function

Summary

• Cobb-Douglas production function \(y=f\left( x_1,x_2 \right)=Ax_1^ax_2^b\)
• \(a+b=1\) : Constant return to scale
• \(a+b>1\) : Increasing return to scale
• \(a+b<1\) : Decreasing return to scale