A Constant Elasticity Cost Function:
A) Takes a Form $T C = a Q ^ { b } w ^ { e } r ^ { d }$

question 6

Multiple Choice

A constant elasticity cost function:

• A) takes a form such as \(T C = a Q ^ { b } w ^ { e } r ^ { d }\) and is useful in empirical work because it can be converted into a linear form using logarithms.
• B) takes a form such as \(T C = w L + r K\), where \(L\) and \(K\) are chosen to minimize cost, and \(w\) and \(r\) are input prices.
• C) takes a form such as \(T C = a Q ^ { 2 } + K L\).
• D) is given by \(T C = A C x Q\).