Answer to Question #219985 in Microeconomics for Relebogile

Question

Explain the following terms using a diagram A Cobb Douglas production function

Answer 1

A measure of output by the Cobb-Douglas prototype the resemblance among output and input components (factors). It can be used to evaluate input metrics and forecast new technologies for productive manufacturing processes. The basic sense for Cobb-Douglas production function for a number of n input components is as shown below;

$Y=f(x1,x2,...,xn)=γ∏i=1nxiαi$

In this function, Y stands for output, i stands for inputs whereas, γ and αi are parameters determining the efficiency of the production function. This linear equation was applied to monitoring production by the statistician Charles Cobb and also the economics professor Paul Douglas that use it to take into account the relative value in production in the United States of the two objective functions of labor and capital between 1899 and 1922.