Price Elasticities Implied by Homogeneous Production Functions

If a production process is characterized by a homogeneous production function, the conditions required for profit maximization imply that the elasticity of demand for each input must be elastic with respect to output price. This restriction limits the usefulness of these functions in empirical analysis.

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Year of publication:	1994
Authors:	Price, J. Michael
Published in:	Journal of Agricultural Economics Research. - Economic Research Service. - 1994, 2
Publisher:	Economic Research Service
Subject:	homogeneous production functions \| Cobb-Douglas production functions \| elasticity of input demand \| elasticity of supply \| Marketing

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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