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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View this answer{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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