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Determine the relationship between production and cost

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Reference no: EM132325987

Long-run Production - Outline

These are the most important ideas:

Definitions:

  • Isoquants
  • Isocost curves
  • Expansion path
  • Economies and diseconomies of scale
  • Economies of scope
  • Purchasing economies of scale

Concepts:

  • Characteristics of isoquants
  • Characteristics of isocost curves
  • How the expansion path determines the relationship between production and cost
  • Relationship between long-run average cost and long-run marginal cost
  • Reasons for economies and diseconomies of scale
  • Reasons for economies of scope
  • Reasons for purchasing economies of scale

Formulas:
Marginal rate of technical substitution (MRS)
MRTS= (MPL)/(MPK)
"Bang per buck" rule in production: (MPL)/w=(MPK)/r
Long-run average cost
Long-run marginal cost

Procedures:
Finding the inputs that achieve a production target at minimum cost
Finding the inputs that maximize production given a costs level
Using the :"bang per buck" rule in production to determine how to adjust input mix

Verified Expert

The assignment contains two sections based on long run production. The first section uses the concepts of isoquants and isocosts. The graph has been made using the pen and paper. The second section deals with the concepts of marginal productivity. It also deals with the concept of lagrange theorem to find the optimism values of labor and capital.

Reference no: EM132325987

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inf2325987

7/8/2019 5:04:36 AM

the right homework was not done please can you review. here attached is what i sent earlier... 33737996_1Long-run Production Case Study SUM19.pdf he had to do all sections i did not just say section 1 and section 2. so i will need for the expert to do the other sections please.. I am happy with the work and revision that you guys made for me. Everything was done in time and with perfect accuracy. I would like to thank ankur who really helped me a lot for all the revision work that I asked for. Thanks a lot.

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