Least cost factor combination, Managerial Economics

Assignment Help:

Producers Equilibrium or Optimal Combination of Inputs 

The analysis of production function has demonstrated that alternative combinations of factors of production that are technically efficient can be used to produce a given level of output. Of these, firm will have to choose that combination of factors that will cost it the least. In this way firm can maximise its profits. Choice of any particular method from a set of technically efficient methods is an economic one and it's based on the prices of factors of production at a specific time.

Firm can maximise its profits either by maximising the level of output for a given cost or by minimising the cost of producing a given output. In either case, factors would have to be used in optimal combination at which the cost of production will be minimum.

There are two ways to determine the least cost combination of factors to produce a given output. Which is,

  • Finding the total cost of factor combinations
  • Geometrical method

Related Discussions:- Least cost factor combination

Term paper, I have a research paper that is due, my schedule is so full tha...

I have a research paper that is due, my schedule is so full that I need assistance due to overload are you interested in the research paper? course - managerial economics TEXT: Man

Game theory, In a one-shot game, if you advertise and your rival advertises...

In a one-shot game, if you advertise and your rival advertises, you will each earn RM5 million in profits. If neither of you advertises, your rival will make RM4 million and you w

What do you mean by theory of firm, Q. What do you mean by Theory of Firm? ...

Q. What do you mean by Theory of Firm? Microeconomics especially the theory of firm, assumed importance and attracted considerable attention in the early 20 th century. This sh

Explain about labour economies, Q. Explain about Labour Economies? Lab...

Q. Explain about Labour Economies? Labour Economies: As the size of output increases the firm enjoys labour economies because of (a) specialisation, (b) time-saving (c) autom

Projection method of demand forecasting, Explain trend projection method of...

Explain trend projection method of demand forecasting with illustration.

Eating a certain amount, Jeremy is an economics learner who loves hamburger...

Jeremy is an economics learner who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u

Principles, what is the full concept of discounting principles of manageria...

what is the full concept of discounting principles of managerial economics ?

Operating leverage, what is the relation between leverage and elasticity?

what is the relation between leverage and elasticity?

State the demand analysis, State the Demand analysis Analysis of dem...

State the Demand analysis Analysis of demand is assumed to forecast demand that is a basic component in managerial decision-making. Demand forecasting is of importance since

Disadvantages of a free economy, Disadvantages of a Free Economy The f...

Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd