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

Answer rating: 100% (QA)

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 ... View the full answer