Diminishing Returns Q
Just a bit confused. The Cobb-Douglas function is homogenous to a degree of 1, but the production function displays diminishing returns. The MPL and and MPK have diminishing returns too. the s bar Y curve also exhibits diminishing returns. All of it seems consistent - apart from how the Cobb-Douglas is homogenous and so exhibits constant returns to scale? Don't see how this would work unless the textbook means that the Cobb-Douglas is also inherently experiencing diminishing returns, but experiences constant returns to scale in the sense that doubling input would shift the whole curve up by a proportional amount, but the curve itself is still diminishing?
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