A more general form of the Cobb Douglas production function is q = f(L, K) = AL^aK^b where A, a,...
Question:
A more general form of the Cobb Douglas production function is {eq}q = f(L, K) = AL^aK^b {/eq} where A, a, b > 0 are constants.
In one sentence, interpret what is {eq}MRTS_{L, K} {/eq} tells you if A = 20, a = b = 0.5; and L = 10; K = 20.
Marginal Product:
Marginal Product of a variable factor or a fixed factor refers to additional unit of goods produced due to one addition unit of variable factor or fixed factor in production. Marginal rate of technical substitution can be calculated by dividing the marginal product of factors used in production.
Answer and Explanation: 1
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View this answerGiven:
{eq}Q = AL^{a} K^{b} {/eq}
A = 20
a = 0.5
b = 0.5
L = 10
K = 20
MPL = Change in Q/ Change in L
MPL = dQ/dL
So, Differentiating the...
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The Cobb Douglas Production Function: Definition, Formula & Example
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Chapter 1 / Lesson 7
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Learn the definition of a production function in economics, understand the definition of a Cobb-Douglas production function and its formula, and explore some examples of Cobb-Douglas production function.
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