A New Class of Production Function

Abstract

In this article, we propose a new class of production functions in the new classical theory of economics and study its qualities based on Euler’s relation of quasi-homogeneous functions. In a market economy environment, it is crucial to establish a firm ’ s profitability and draw conclusions about the operation and to make a variety of assumptions using a function that is more consistent with reality in the future. We showed that the quasi-homogeneous function is a general form of the well known production functions such as Cobb-Douglas and Constant Elasticity of Substitution (CES). We have made some qualitative and quantitative analysis and compare our results with the classical models using statistical data of Japan.