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Hot answers tagged production-function

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Solow Model: Steady State v Balanced Growth Path

This is when the attempt at accuracy creates confusion and misunderstanding. Back in the day, growth models were not incorporating technological progress, and led to a long-run equilibrium ...
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How to derive firm's cost function from production function?

"I am not given wealth $w$ although I suppose I could assume any firm who is purchasing has some budget." No. This is exactly where the fundamental microeconomic theory of the firm differs from the ...
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How was the CES production function derived?

The CES function can be derived directly from the condition of constant elasticity of substitution. There are various ways to do this, but the simplest derivation occurs for a homothetic production ...
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