Question

How do you solve the lagragian equation for a constant elasticity of substitutions

Answer 1

Answer:

$\huge{\mathcal{\green{A}\pink{N}\purple{S}\pink{W}\purple{E}\pink{R}\purple{:}\pink{:}}}$

The Constant Elasticity of Substitution Production Function or CES implies, that any change in the input factors, results in the constant change in the output. In CES, the elasticity of substitution is constant and may not necessarily be equal to one or unity.

Answer 2

Which is C equals 10 L plus 10 K. The 10 in front of the L is the wage the 10 in front of the K is the price of capital or the rental rate of capital. We'll set up our Lagrangian.