Question

"Can you explain to me why is not cobb fuction?

I think Y=k⁰.⁵*ᴸ⁰.⁵ if k is 1.1K, L is 1.1L
Y=1.1K⁰.⁵*1.1L⁰.⁵ I do not know why is constant return to scale. I hope the right answer with explain
How do competitive, profit-maximizing firms determine the optimal level of a factor? a. The firm demands each factor of production until that factor's marginal product equals its nominal factor price."

Answer 1

The Cobb function is not represented by the equation Y=k⁰.⁵*ᴸ⁰.⁵ and a competitive, profit-maximizing firm determines the optimal level of a factor by equating the marginal product of the factor to its nominal factor price.

Step-by-step explanation:

The Cobb function is not represented by the equation Y=k⁰.⁵*ᴸ⁰.⁵ because it does not exhibit the constant return to scale property. The Cobb function is given by the equation Y=k⁰.⁵*ᴸ⁰.⁵ where k represents the amount of capital and L represents the amount of labor. In a Cobb function, if both k and L are increased by the same proportion, the output Y will increase by a greater proportion. This relationship does not hold in the equation Y=k⁰.⁵*ᴸ⁰.⁵ provided

A competitive, profit-maximizing firm determines the optimal level of a factor by equating the marginal product of the factor to its nominal factor price. In other words, the firm will demand more of a factor until the additional output it produces is worth as much as the additional cost of obtaining that factor. This ensures that the firm is maximizing its profits.