Production function with two variable inputs
If both, capital and labour are variable a different set of analytical techniques is applied to determine the optimal input rates. There are twin methods to approach the problem of efficient resource allocation in production. They are, firstly output maximization - to maximize the production for a given rupee outlay on labour and capital and secondly, cost minimization - to minimize the rupee outlay on labour and capital necessary to produce a specified rate of output.
These are also known as problems of constrained optimisation. In the first case fixed monetary outlay is the constraint while in the second case it is the specified rate of output to be produced.
If only labour and capital are variable inputs then selection of optimal factor combinations will depend upon:
- Technical possibilities of factor substitution (isoquants) and
- Prices of factors of production (isocost lines)
Managerial Economics Tutoring - Assignment Help
Our online managerial economics experts are here for your help. Expertsmind.com online assignment help-homework help brings you high grade in your courses and examination, We at Expertsmind.com offers managerial economics assignment help, managerial economics homework help and projects help. We offer complete package of managerial economics online tutoring for 24x7 hours.
ExpertsMind.com - Two Variable Inputs Assignment Help, Two Variable Inputs Homework Help, Two Variable Inputs Assignment Tutors, Two Variable Inputs Solutions, Two Variable Inputs Answers, Production Function Assignment Tutors