The original Cobb-Douglas function was given as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho } \mathrm { L } ^ { 1 - \rho }$ .It was subsequently rewritten as $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho 1 } \mathrm {~K} ^ { \rho2}$ .What benefit was derived in the revision?

Question

Quizplus · Accepted Answer

The revision allows the Cobb-Douglas function to explicitly include capital (K) as a factor of production, making it possible to analyze returns to scale by examining the sum of the exponents $\rho1$ and $\rho2$.

The Original Cobb-Douglas Function Was Given As Q=αLρL1−ρ\mathrm { Q } = \alpha \mathrm { L } ^ { \rho } \mathrm { L } ^ { 1 - \rho }Q=αLρL1−ρ

The Original Cobb-Douglas Function Was Given As $\mathrm { Q } = \alpha \mathrm { L } ^ { \rho } \mathrm { L } ^ { 1 - \rho }$