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1 = Aab

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Show that in the case of Cobb-Douglas production function with constant returns to scale, if each factor ofa b
9 = ALK
atb = 1 homogeneous function of degree one
BR =7JW
a – 1
= AGL , K
b
MPic =
a b – 1
k –
= AbL . K
payment to each factor; MPXXK + APK XL
a-1 b
YL = 09. 1 = Aab. KIL
dL
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