Composite Production Functions

Abstract

In the article we suggest the approach for production functions which takes into account the proportions of used resources. Composite production function is defined as maximum of output using multiple technologies, among which resources are allocated. We explore properties of these functions for technologies characterized by basic production functions (PFs). As basic we consider general homogeneous PFs and Cobb – Douglas, CES and Leontief PFs. De fined composite PFs are obtained in the form of continuous splines formed by pieces of isoquants of basic and liner PFs. And these composite PFs could be generated in the composite regimes of resource allocation among multiple basic PFs.