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

Manegerial economics, Profit maximiZation is theoretically the most sound b...

Profit maximiZation is theoretically the most sound but practically unattainable objective of business finns. Do you agree this statement? If agree give

ECONOMIC THEORY, How does economic theory contribute to managerial decision...

How does economic theory contribute to managerial decisions?

Economic terms a managerial decision assignment, Describe and answer in eco...

Describe and answer in economic terms a managerial decision you have knowledge about (for example one that has to be made at your place of employment). Some examples of decisions a

Remedies for unemployment, REMEDIES FOR UNEMPLOYMENT The measures appro...

REMEDIES FOR UNEMPLOYMENT The measures appropriate as remedies for unemployment will clearly depend on the type and cause of unemployment.  Broadly they can be divided into:

Trade cycle-keynes and mitchell description, Keynes and  Mitchell Descript...

Keynes and  Mitchell Description According to Keynes description, a trade cycle is characterised by alternating expansionary and contractionary wavy movements in the aggregate

Demand forecasting methods, Prediction markets:   These are speculative mar...

Prediction markets:   These are speculative markets fashioned with the intention of making predictions. Assets which are produced possess an ultimate cash worth bound to a specific

Nature of demand curves and elasticity, Usually, elasticity of a demand cur...

Usually, elasticity of a demand curve throughout its length isn't the same (Fig. below). It varies between 0 and ∞, or in other words, 0 ≤ e p ≥ ∞ In some cases, though, the

Uses of production function, The production function can have many uses. It...

The production function can have many uses. It can be used to compute least-cost factor combination for a given output or maximum output combination for a given cost. Knowledge of

Can you explain about demand forecasting, Q. Can you explain about Demand F...

Q. Can you explain about Demand Forecasting? Demand forecasting involves forecasting and estimating the quantity of a service or product that consumers will buy in future. It 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