When a production function has the form Q = aL + bK, we can say that
A) the production function is linear and the inputs are perfect substitutes.
B) the production function is linear and the inputs are perfect complements.
C) the production function is linear and the inputs are used in fixed factor proportions only.
D) the production function is non-linear and the inputs are perfect substitutes.

Question

Quizplus · Accepted Answer

The production function Q = aL + bK is linear, indicating that the inputs (labor L and capital K) are perfect substitutes, meaning they can be substituted for one another at a constant rate.

When a Production Function Has the Form Q = AL