A firm has two variable factors and a production function f(x₁, x₂) = . The technical rate of substitution between x₁ and x₂ is constant.

Question

Quizplus · Accepted Answer

The statement mentions that the technical rate of substitution between the two variables is constant, which implies that the production function has constant elasticity of substitution between these variables. Therefore, the answer is A.

A Firm Has Two Variable Factors and a Production Function