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en:linear-production-function [2014/04/04 06:47] 200.123.218.241 |
en:linear-production-function [2017/04/11 10:36] federico |
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| ====== Linear Production Function ====== | ====== Linear Production Function ====== | ||
| - | The linear production function describes a linear relationship between the inputs and the output. | + | The linear [[en:production-function|production function]] describes a linear relationship between the inputs and the output. |
| For example: | For example: | ||
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| - | The linear production function has constant returns to scale. | + | The linear production function has constant [[returns to scale]]. |
| **Proof**:\\ | **Proof**:\\ | ||
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| The elasticity of substitution is ∞. | The elasticity of substitution is ∞. | ||
| + | Proof: | ||
| + | The [[elasticity of substitution]] is the change in K/L divided the change in the MTRS, when K/L changes. | ||
| + | |||
| + | The MTRS is constant. The change in the MTRS is always 0. | ||
| + | |||
| + | By definition, the numerator is not 0. | ||
| + | |||
| + | The elasticity of substitution is ∞. | ||
| + | |||
| + | [[Proof of The Law of Cosines]] | ||