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

Review, # review of Article what can economic theory contribute to manageri...

# review of Article what can economic theory contribute to managerial economic#

Knight theory of the profit, Frank H. Knight treated profit as a residual r...

Frank H. Knight treated profit as a residual return to uncertainly profit. Obviously knight made a distinction between risk and uncertainly he divided risk into calculable and non-

Environmental issues of managerial economics, Environmental issues of Manag...

Environmental issues of Managerial economics Managerial economics also includes some aspects of macroeconomics. These relate to political and social environment in that anin

Burden of the national debt, Burden of the national debt The extent of...

Burden of the national debt The extent of the burden on a nation of public debt, depends in the first place on whether it is an external or an internal debt.  The burden of th

Money supply, examine the endogenous and exogenous determinants of money su...

examine the endogenous and exogenous determinants of money supply

Sales maximization, how realistic is the sales maximisation model from your...

how realistic is the sales maximisation model from your experience with business objectives as persued by firms

Time factor for determinants of demand, Q. Time Factor for Determinants of ...

Q. Time Factor for Determinants of Demand? Price-elasticity of demand depends moreover on the time that consumers take to adjust to a new price: longer the time taken, greater

Measuring point elasticity on a non-linear demand curve, Measuring Point El...

Measuring Point Elasticity on a Non-linear Demand Curve Let's now explain the method of measuring point elasticity on a non-linear demand curve. Assume we want to measure the

The determination of equilibrium national income, THE DETERMINATION OF EQUI...

THE DETERMINATION OF EQUILIBRIUM NATIONAL INCOME National income is said to be in equilibrium when there is no tendency for it either to increase or for it to decrease.  The a

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