Question: 2.EXPLAIN (a) Why when two inputs are used in xedproportion, both the expansion path and the total cost function are linear? But, for a Cobb-Douglas


2.EXPLAIN (a) Why when two inputs are used in xedproportion, both the expansion path and the total cost function are linear? But, for a Cobb-Douglas type of production function, for example, Q = KL, the expansion path is still linear,but the total cost function is nonlinear? (b) Why for a xedproportion type production function, the short run costs of producing any given output are the same as the longrun costs
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
