Question
A firm has a general production function of the form Q =f (K, L) where K is capital and L is labor. a. Show that
A firm has a general production function of the form Q =f (K, L)
where K is capital and L is labor.
a. Show that the rate of technical substitution (RTS) equals the ratio of the marginal physical products. the
2 Marks
b. One of the specific and popular functions used in analysis of production is the Cobb-
Douglas. State and explain the merits of using this function.
4 Marks
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The detailed answer for the above question is provided below a The rate of technical substitution RTS measures the rate at which the firm can replace ...
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Intermediate Microeconomics and Its Application
Authors: walter nicholson, christopher snyder
11th edition
9781111784300, 324599102, 1111784302, 978-0324599107
