The CES Production of a Firm (With Equation)
A production function with constant elasticity of substitution (CES) between the inputs—the CES production function as it is called—has two major characteristics. First, it is homogeneous of degree one. Second, it has a constant elasticity of substitution. Production functions which do not possess one or both of these characteristics do not belong to the CES class. The Cobb-Douglas (C-D) production [...]