Abstract: Almost all economic theories presuppose a production function, either on the firm level or the aggregate level. In this sense the production function is one of the key concepts of mainstream neoclassical theories. While there are many different production functions, only certain kinds of production functions are homogeneous. In general, they are multiplicative rather than additive although a few exceptions exist. Homogeneous production functions consist of a broad array of functions with a special characteristic. This paper therefore explores or examines production function and its features, homogenous production and its properties with policy application of elasticity of substitution. Constant elasticity of substitution was also considered. Despite the fact that the CES production function appears to be a very complicated function, it is a useful pedagogical tool in that it can be used to illustrate what happens to the shape of a series of isoquants as the elasticity of substitution changes.
Keywords: production function, homogenous production function, CES production function.
Title: HOMOGENEOUS PRODUCTION FUNCTION
Author: Idisi P. O., Ogwu I. J., Ifekoya C.C.
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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