A production process that involves two inputs,capital and labor,the constant elasticity long-run total cost function defined in linear relationship using logarithms is
A) log TC = log a + b log Q + c log w + d log r
B) log T = log t + c log Q + a log w + b log r
C) T = log t + c log Q + a log w + b log r
D) T = t + cQ + aw + br

Question

Quizplus · Accepted Answer

The constant elasticity long-run total cost function is typically defined as log TC = log a + b log Q + c log w + d log r, where TC is total cost, Q is quantity of output, w is wage rate, and r is the rental rate of capital. This function assumes a linear relationship when using logarithms. Choice A is the only option that follows this format.

A Production Process That Involves Two Inputs,capital and Labor,the Constant