The cost function $C = Q \left[ v ^ { 1 / 2 } + w ^ { 1 / 2 } \right] ^ { 2 }$ arises from
A)a Cobb-Douglas production function.
B)a CES production function.
C)a fixed proportions production function.
D)a Translog production function.

Question

Quizplus · Accepted Answer

The cost function given is derived from a CES (Constant Elasticity of Substitution) production function, which allows for a constant elasticity of substitution between inputs, reflected in the square root terms.

The Cost Function C=Q[v1/2+w1/2]2C = Q \left[ v ^ { 1 / 2 } + w ^ { 1 / 2 } \right] ^ { 2 }C=Q[v1/2+w1/2]2

The Cost Function $C = Q \left[ v ^ { 1 / 2 } + w ^ { 1 / 2 } \right] ^ { 2 }$