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A Note on Separability of the Profit Function
Department of Economics, Oregon State University, Corvallis, OR, USA
Department of Economics, University of Macedonia, Thessaloniki, Greece
Department of Agricultural & Resource Economics, Oregon State University, Corvallis, OR, USA
- 1 Department of Economics, Oregon State University, Corvallis, OR, USA
- 2 Department of Economics, University of Macedonia, Thessaloniki, Greece
- 3 Department of Agricultural & Resource Economics, Oregon State University, Corvallis, OR, USA
Theoretical Economics Letters·Volume 04 (2014)·Pages 702–704·Published 7 October 2014·DOI10.4236/tel.2014.48089
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Abstract
Based on the concept of translation elasticity we restate in this note the Fare and Grosskopf’s [1] conditions for additive separability of the profit function. We show that for the profit function to be additively separable, the technology must satisfy both simultaneous input-and-output translation homotheticity and graph translation homotheticity.
KeywordsSeparabilityProfit FunctionDirectional Distance FunctionGraph Translation HomotheticitySimultaneous Input-and-Output Translation Homotheticity
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