Do cobb douglas functions show diminishing marginal utility
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Heya....
Yes Cobb Douglas production function shows diminishing marginal Utility with other name commonly called law of variable proportion....
As in this function output is increased by using more and more variable factors...
And accordingly law of diminishing marginal Utility the output at point starts to decline and suddenly becomes zero and negative....
Because variable factor crossed their fixity same as we can't use same good for a long time...
Yes Cobb Douglas production function shows diminishing marginal Utility with other name commonly called law of variable proportion....
As in this function output is increased by using more and more variable factors...
And accordingly law of diminishing marginal Utility the output at point starts to decline and suddenly becomes zero and negative....
Because variable factor crossed their fixity same as we can't use same good for a long time...
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