The Cobb-Douglas production function has the following general form: F(K,L)=ZK^{ \alpha}L^{1-...

Question:

The Cobb-Douglas production function has the following general form:

{eq}F(K,L)=ZK^{ \alpha}L^{1- \alpha} {/eq}

where Z > 0 is a parameter that represents overall productivity and {eq}\alpha {/eq} is any constant between 0 and 1.

Verify that the Cobb-Douglas production function above satisfies the assumption of constant returns to scale and diminishing returns to a single factor.

Production Function

: Production function shows a technical relationship between the output and inputs used in the production process. Labor and Capital are inputs used to produce the output. Cobb-Douglas production function is the most commonly used production function.

Answer and Explanation: 1

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{eq}\begin{align*} {\rm{F}}\left( {{\rm{K,L}}} \right) &= {\rm{Z}}{{\rm{K}}^{\rm{\alpha }}}{{\rm{L}}^{1 - {\rm{\alpha }}}}\\ {\rm{Z >...

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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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