PRODUCTION FUNCTION WITH CONSTANT ELASTICITY OF SUBSTITUTION RESOURCES
Journal Title: Вісник соціально-економічних досліджень - Year 2015, Vol 3, Issue 58
Abstract
The advantages of the production function with constant elasticity of substitution of resources (CES-function) and the possibility of its use in economic calculations are investigated in the article. The most important economic and mathematical parameters of CES-function and software its unknown factors evaluation are discussed. The optimal capital-maximizing output is determined. It is shown that in this case the marginal rate of substitution of resources equals to one. A new interpretation of it as an indicator of imbalances when investing in aggregate factors «capital» and «labor» is proposed. Deduced marginal rate of substitution of resources based on the optimal capital-labor ratio can be used as an important additional feature when applying the production function in the analysis output in the enterprises of Ukraine.
Authors and Affiliations
Volodymyr Yankovyi
Keywords
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