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

Caselet, plot the demand schedule and draw the demand curve for the data gi...

plot the demand schedule and draw the demand curve for the data given for marijuana in the case above

Interest rates, Interest rates Decreasing the rate of interest may...

Interest rates Decreasing the rate of interest may not encourage investment but increasing the interest rate tends to lock up liquidity in the financial system.

Costing, Ask quesCase Study Electron Control, Inc., sells voltage regulato...

Ask quesCase Study Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sens

M.E, What is the goal of a firm?

What is the goal of a firm?

Eco401, d/f b/w MRTS and MRS

d/f b/w MRTS and MRS

Fezzes is perfectly competitive, The  fez is the typical Arabic hat in the ...

The  fez is the typical Arabic hat in the shape of a short red cylinder. Historians believe it was manufactured in the city of Fes, in Morocco, during the 17 th century. It has be

Electron control inc, electron control,inc.,cells voltage regulators to oth...

electron control,inc.,cells voltage regulators to other manufacturers , who then customize and distribute the products to quality assurance labs for their sensitive test equipment.

Theories associated with different market structures, Theories associated w...

Theories associated with different market structures A firms profit maximising output decisions take into account the market structure under that they operate. There are 4 type

Managerial economics, present a detailed discussion of the principles of ma...

present a detailed discussion of the principles of managerial economics

Illustrate fiscal monopoly, Q. Illustrate Fiscal Monopoly? Fiscal Mono...

Q. Illustrate Fiscal Monopoly? Fiscal Monopoly:   To stop exploitation of consumers andemployees, government nationalises many industries and obtains fiscal monopoly power ove

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