A common functional form in production theory is the CES (constant elasticity of substitution) function In this

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A common functional form in production theory is the CES (constant elasticity of substitution) function

In this case the competitive firm's cost minimization problem is

subject to f(x) = (a1xp1 + a2xp2)1/p = y

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Foundations of Mathematical Economics

ISBN: 978-0262531924

1st edition

Authors: Michael Carter

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Question Posted: May 02, 2016 11:53 AM

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A common functional form in production theory is the CES (constant elasticity of substitution) function In this

Question:

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

Foundations of Mathematical Economics

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