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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.
solution for calculate price elasticity of demand for demand function Q= 10 - 2p for decrease in price from Rs. 3 to Rs.2..
User Cost of Capital = Economic Depreciation + (Interest Rate)(Value of Capital) - Example An Airline buys Boeing 737 for $150 million with the expected life of 30
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A consumer purchases food (X) and clothing (Y). Her utility function is given by: , income is $100 and the price of food is $1 and the price of clothing is Py. a. Derive the equ
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please can you explainn what "down 0.1 percentage point on the quarter means"?
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