Abstract
This paper deals with the relation between engineering and economic analyses of production. Focus is on explaining the existence of optimal design laws, laws that are frequently used in the engineering literature. These laws are the result of an economic optimisation process but are independent of prices in the sense that they continue to hold regardless of price variability. We offer a very simple theoretical explanation to the existence of these laws, the essence being the relation between the number of optimal design laws and the number of economic production factors. These findings can be used to specify more realistic functional forms for the empirical relations between inputs and output of production. (C) 2003 Elsevier B.V. All rights reserved.
| Original language | English |
|---|---|
| Pages (from-to) | 203-206 |
| Number of pages | 4 |
| Journal | International Journal of Production Economics |
| Volume | 92 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 2004 |
Keywords
- engineering production function
- design laws
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