Answer to Question #225486 in Economics of Enterprise for sulo

Question

“The Cobb-Douglas production function is widely used in managerial economic and empirical analysis because it possesses several useful mathematical properties” As a manager of an organization, how you could apply Cobb-Douglas production function for decision making?  

Answer 1

As a manager, I would use the Cobb - Douglas production function to estimate how much output they should make given a thing's pricing and what mix of inputs they should use to produce given the price of capital and labor. To detect rising marginal costs, the production function might be employed.