DETERMINATION OF OPTIMUM OF CAPITAL-LABOUR RATIO WITHIN TWO-FACTOR PRODUCTION FUNCTIONS WITH NON-ZERO SUBSTITUTION BY THE PRINCIPLE OF EQUAL MARGIN

Анотація

Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economic-mathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.

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