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Download Solution PDFIn Leontief production function. L is considered as
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Detailed Solution
Download Solution PDFIn the Leontief production function. L is considered a Binding constraint in the production process
- The Leontief Production Function (LPF), named for the father of Input-Output economics Wassily Leontief. It is also known as the Fixed-Proportions Production Function. We still see the output (Q) being a function of capital (K) and labor (L). The designation of min refers to the smallest numbers for K and L.
- The isoquants in the LPF are right angles.
- In economics, the Leontief production function or fixed proportions production function is a production function that implies the factors of production will be used in fixed (technologically pre-determined) proportions, as there is no substitutability between factors. It was named after Wassily Leontief and represents a limiting case of the constant elasticity of substitution production function.
A binding constraint is one where some optimal solution is on the line for the constraint. Thus if this constraint were to be changed slightly (in a certain direction), this optimal solution would no longer be feasible. A non-binding constraint is one where no optimal solution is on the line for the constraint.
Last updated on Jul 7, 2025
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