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

Production and cost analysis , What is the formula of finding Fixed cost of...

What is the formula of finding Fixed cost of a quadratic function

What is the minimum cost of producing each level of output, Suppose that in...

Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1

Case syudy., Please read the case study given below and answer questions gi...

Please read the case study given below and answer questions given. Case Study Electron Control, Inc., sells voltage regulators to other manufacturers, who then cu

#sales maximisation theory, how realistic is the sales maximization model f...

how realistic is the sales maximization model from experience with business objectives as pursued by Zimbabwean firms

Marris’ Growth Maximisation Model, #question.Constraints of Marris’ Growth...

#question.Constraints of Marris’ Growth Maximisation Model

Elasticity of demand, a. Explain why the demand for a particular brand is m...

a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast

Elasticity.., elasticity concepts occupies a central place in policy formul...

elasticity concepts occupies a central place in policy formulation explain in details

What is an effective need of demand, What is an effective need of demand ...

What is an effective need of demand 1.  An Effective Need: Effective need demands that there must be a need supported by the capacity and readiness to shell out. Henceforth there

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