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Mathematics, 24.05.2021 14:00 Sariyahhall1
A "Cobb-Douglas" production function relates production (Q) to factors of production, capital (K), labor (L), raw materials (M), and an error term u using the equation ,
Q= λK^β1L^β2M^βe^μ
where λ,β1,β2 and β2 and are production parameters. Suppose that you have data on production and the factors of production from a random sample of firms with the same Cobb-Douglas production function. Which of the following regression functions provides the most useful transformation to estimate the model?
a. A linear regression function.
b. A logarithmic regression function.
c. An exponential regression function.
d. A quadratic regression function.
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