Which of the following is not one of the strengths of the Cobb-Douglas production function?
A)Both marginal product and returns to scale can be estimated from it.
B)It can be converted into a linear function for ease of calculation.
C)It shows a production function passing through increasing returns to constant returns and then to decreasing returns.
D)The sum of the exponents indicates whether returns to scale are increasing,constant or decreasing.

Question

Quizplus · Accepted Answer

The Cobb-Douglas production function does not show a production function passing through increasing returns to constant returns and then to decreasing returns. Instead, the function shows the relationship between inputs and outputs, where both marginal product and returns to scale can be estimated, returns to scale can be determined from the sum of the exponents, and it can be converted into a linear function for ease of calculation.

Which of the Following Is Not One of the Strengths