Question #314575
Explain the two characteristics of the Cobb Douglas production
function that make it particularly useful to macroeconomists
Expert's answer
1. Diminishing marginal product; which is expressed in terms of the average physical productivity. It's a change in total output due to a one unit change in total output due to the use of a particular output.
2. Output elasticities
Which shows the percentage in output due to a given percentage change in number of factor input.
