One of the key characteristics of the Cobb-Douglas production function is:
A) increasing returns to scale.
B) decreasing returns to scale.
C) constant returns to scale.
D) that it compacts all inputs into a single equation.
E) that it is an exact replication of a firm's production function.

Question

Quizplus · Accepted Answer

The Cobb-Douglas production function exhibits constant returns to scale, meaning that if all inputs are increased by a certain percentage, output will increase by the same percentage. It does not necessarily compact all inputs into a single equation, and it is not an exact replication of a firm's production function since each firm's production function is unique.

One of the Key Characteristics of the Cobb-Douglas Production Function