Write down the equation of the isocost line thay includes

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Suppose the price of solar panel (Pe) is $20 and the price of coal (p) is $10 and a representative firm in the power-sector has two types of technologies availble with a goal to produce on KWh of electricity

Question 1. Calculate the production costs required for the two types of technology. Which technology would a firm choose?

Question 2. Write down the equation of the isocost line thay includes each technology. Make E the subject of the equation

Question 3. Draw the two isocost on a diagram. Indicate Technologies A and B and the relative input price

  Coal (R) Solar Panel (E)
Technology A 4 units  2 units 
Technology B 1 units  6 units 

Suppose the price of solar panel (Pe) is $20 and the price of coal (p) is $10 and a representative firm in the power-sector has two types of technologies avaible with a goal to produce one KWh of electricity

 

Reference no: EM133512370

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