Given the CES production function , the elasticity of substitution between factors is
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UGC-NET 2024 Question 59: Production and returns to scale
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Given the CES production function y = [a₁ x₁^p + a₂ x₂^p]^(1/p), the elasticity of substitution between factors is (A) 1 (B) P (C) 1/P (D) 1/(1-P)
Also written as: Given the CES production function y = [a_1 x_1^p + a_2 x_2^p]^(1/p), the elasticity of substitution between factors is
Production and returns to scale has come up 92 times in 6 exams since 2007.
What this question tests
This question is on Production functions and the elasticity of substitution, part of Production and returns to scale in Microeconomics.
Cobb-Douglas, CES and fixed-proportions technologies, and how easily inputs substitute.
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