IDENTIFICATION OF THE PRODUCTION FUNCTION BY THE FORM OF THE MARGINAL CHARACTERISTICS, THE MARGINAL SUBSTITUTION RATE, THE ELASTICITIES AND THE COST FUNCTION

Alexandru Braila and Zinovia Toaca
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Alexandru Braila: Academy of Economic Studies of Moldova
Zinovia Toaca: Academy of Economic Studies of Moldova

Revista Economica, 2020, vol. 72, issue 3, 8-18

Abstract: This communication proposes some ways of building production functions (PF) based on its assumptions, characteristics and main properties. The specificity of the activities of each production system leads to the idea that there is a wide variety of PF, virtually every system having its own production function. This is not so much as regards the parameters of the various types of PF as the shape of these functions. Thus, depending on the particularities of those activities, the form of PF may be specified, a form which makes it possible to assess that it belongs to a certain class of functions mentioned, including certain amendments. The conceptual framework for identifying the form of the production function, which depends on the relative indicators of PF, is presented. It was analyzed induced PF form of marginal yields, elasticities, marginal substitution rate and substitution elasticity. Approval of proposed approaches can be carried out on the basis of statistical data using econometric methods.

Keywords: Production function Cobb Douglas; marginal proprieties; elasticity; cost function (search for similar items in EconPapers)
JEL-codes: C01 C02 C13 C52 C53 (search for similar items in EconPapers)
Date: 2020
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