A production function is said to be homogeneous of degree if (xL, xK) = x

Question:

A production function is said to be homogeneous of degree γ if ƒ(xL, xK) = xγ ƒ(L, K), where x is a positive constant. That is, the production function has the same returns to scale for every combination of inputs. For such a production function, show that the marginal product of labor and marginal product of capital functions are homogeneous of degree γ – 1?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: