This shows you the differences between two versions of the page.
Both sides previous revision Previous revision Next revision | Previous revision | ||
en:linear-production-function [2014/04/04 06:46] 200.123.218.241 [Returns to scale] |
en:linear-production-function [2018/08/10 11:12] (current) federico |
||
---|---|---|---|
Line 1: | Line 1: | ||
+ | {{htmlmetatags> | ||
+ | metatag-description=(Linear Production Function: definition, examples and formula) | ||
+ | metatag-title=(Linear Production Function: Definition and Explanation [and formula]) | ||
+ | }} | ||
+ | |||
====== Linear Production Function ====== | ====== Linear Production Function ====== | ||
- | The linear production function describes a linear relationship between the inputs and the ooutput. | + | The linear [[en:production-function|production function]] describes a linear relationship between the inputs and the output. |
For example: | For example: | ||
Line 16: | Line 21: | ||
- | The linear production function has constant returns to scale. | + | The linear production function has constant [[returns to scale]]. |
**Proof**:\\ | **Proof**:\\ | ||
Line 29: | Line 34: | ||
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]] |