What is the general form of Cobb-Douglas production function?

The formula for this form is: Q = f(L, K), in which labor and capital are the two factors of production with the greatest impact on the quantity of output.

Does the Cobb-Douglas production function have constant returns to scale?

When the output increases exactly in proportion to an increase in all the inputs or factors of production, it is called constant returns to scale. A regular example of constant returns to scale is the commonly used Cobb-Douglas Production Function (CDPF).

What is the limitation of the Cobb-Douglas production function?

Since, the Cobb-Douglas (CD) function has been (and is still) abundantly used by economists because it has the advantage of algebraic tractability and of providing a fairly good approximation of the production process. Its main limitation is to impose an arbitrary level for substitution possibilities between inputs.

What is the limitation of Cobb-Douglas production function?

Is Cobb-Douglas production function homogeneous?

The Cobb-Douglas production function has been presented in linearly homogeneous form. The mathematical term “linear homogeneity” means constant returns to scale. It shows that when all inputs are increased together in the same proportion output is also increased in the same proportion.

What are the limitations of Cobb Douglas production function?

How is Cobb-Douglas function calculated?

The Cobb-Douglas production function formula for a single good with two factors of production is expressed as following: Y = A * Lᵝ * Kᵅ , this production function equation is the basis of our Cobb-Douglas production function calculator, where: Y is the total production or output of goods.

What are the limitations of production function?

Limitations of Production Function are: Restricts itself to the case of two inputs and one output. Assumes a smooth and continuous curve, which is not possible in the real world, as there are always discontinuities in production. Assumes technology as fixed, which is not possible in the real world.