Nonhomogeneous Production Functions and Applications to Telecommunications

Abstract

A form of nonhomogeneous production function is utilized to compute marginal productivities, various elasticities, optimum input ratios, and the like, for different levels of inputs and outputs. Such comparisons are relevant for labor negotiations, capital investment, and control by either a parent corporation or a government regulatory agency. This form of production function can be fitted by simple regression and allows variable returns to scale and variable elasticities of substitution.