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Allocation Function
The shifting or reallocation of production property into or out of markets based on shifts in prices for the products or services produced in that market. If price moves in a technique that indicates an increase in requirement, more firms may try to enter that market and gives a supply to meet that requirement. Conversely, if price shifts in such a way that demand looks to be diminishing, several firms may choose to leave the market and direct their resources elsewhere.
Ali Pizza’s production function is shown in the table above. Ali currently operates Plant2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150. a) Calcul
3, chapter 12
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