Linearity of Aggregate Production Functions

Christopher Chambers and Alexis Akira Toda

Papers from arXiv.org

Abstract: We prove that when individual firms employ constant-returns-to-scale production functions, the aggregate production function defined by the maximum achievable total output given total inputs is always linear on some part of the domain. Our result provides a microfoundation for the linear production function.

Date: 2023-09
New Economics Papers: this item is included in nep-eff
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