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The economics of production planning

Author

Listed:
  • Ngo Van Long

    () (McGill University)

  • Frank Stähler

    () (University of Tübingen, University of Adelaide, CESifo)

Abstract

This note scrutinizes the role of share parameters in CES production functions. It shows that a firm, when planning production or selecting a production process, aims at maximizing one share parameter at the expense of another in a CES environment. Interior solutions can exist only if factor prices are uncertain to begin with.

Suggested Citation

  • Ngo Van Long & Frank Stähler, 2018. "The economics of production planning," Economics Bulletin, AccessEcon, vol. 38(2), pages 703-711.
  • Handle: RePEc:ebl:ecbull:eb-18-00111
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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I2-P69.pdf
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    More about this item

    Keywords

    Production plan; production functions; CES; Cobb-Douglas;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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