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A Linear Specification, Q = AK + BL, Is Not

Question 46

Multiple Choice

A linear specification, Q = aK + bL, is not appropriate for estimating a production function because


A) the marginal products of the inputs are constant.
B) it does not allow the firm to substitute capital for labor.
C) the firm could produce positive levels of output at zero cost.
D) both b and c
E) all of the above

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