If a firm's production function is f(z₁,z₂)= z₁+ z₂, z₁and z₂are: A)perfect substitutes. B)perfect complements. C)inferior inputs. D)additive inputs.

Question

Quizplus · Accepted Answer

The production function f(z₁, z₂) = z₁ + z₂ indicates that the inputs z₁ and z₂ are used independently to produce output, meaning the firm can substitute one input for the other without affecting production levels. This characteristic defines perfect substitutes.

If a Firm's Production Function Is F(z1,z2)= Z1 + Z2

If a Firm's Production Function Is F(z₁,z₂)= Z₁+ Z₂