A common functional form in production theory is the CES (constant elasticity of substitution) function In this
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In this case the competitive firm's cost minimization problem is
subject to f(x) = (a1xp1 + a2xp2)1/p = y
Transcribed Image Text:
min wixi+w2x2 x1,x2
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The Lagrangean is x 1 1 2 2 1 2 The necessary ...View the full answer
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