Constant Marginal Product of Capital

CFA Level II
#1

“The Cobb Douglas function exhibits constant marginal product of capital but diminishing marginal productivity of capital”

Can someone explain this? I thought that the cobb douglas shows that output increases at a decreasing rate, so why is marginal product of capital constant in this sentence?

Also, what are the main differences

#2

I like the question and would as well appreciate an answer!

#3

I wrote an article on the Cobb-Douglas function that covers this: http://financialexamhelp123.com/cobb-douglas-production-function/.

In a nutshell, it means that if total factor productivity remains constant, increasing both capital and labor by a given percentage will increase output by that same percentage.

#4

Thanks!

#5

You’re welcome.