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The Cobb-Douglas function exhibits ____

March 25, 2017

Constant Return to Scale

This means if all inputs:

  • T = Growth of Technology
  • K = Growth of Capital
  • L = Growth of Labor

are increased at the same percentage then output rises at that percentage.

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From → Economics

One Comment
  1. I’m not sure if this applies to the percentage of capital allocated to labor.

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