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The Cost Minimizing Input Choice
- Assumptions
- R = depreciation rate + interest rate
- Question
* The Isocost Line
- C = wL + rK
- Isocost: A line which shows all the combinations of L & K which can be purchased for same cost
- Rewriting C as linear:
is the ratio of wage rate to rental cost of capital.
* This shows the rate at which capital can be substituted for labor with no change in cost.
Recent developments in demand theory
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if the inverse demand curve is p=120-Qand the marginal cost is constant at 10, how does charging the monopoly a specific tax of 10 per unit affect the monopoly optimum and the welf
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when does a buisness reach shutdown point
Hi I need help with elasticity. I think the problem has already been posted to your site.
During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of th
Let Consider the following insurance market. There are two states of the world, B and G , and two types of consumers, H and L, who have probabilities p H =0.5 and p L
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