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A toy manufacturer makes output according to the production function: where n is the number of workers employed by the firm, O is a technological parameter and g the worker
Q. Show the Isoquant touching axis? Isoquants do not intersect: By definition isoquants such as indifference curves, can never cut each other. If they cut each other it will
Relevance of The Law of Diminishing Returns The law of diminishing returns is important in that it is seen to operate in practical situations where its conditions are fulfille
Q. Show the method of production? A process or method of production is a combination of inputs essential for the production of output. A method of production is technically eff
Q. Implications for the shape of cost function? A cost function is also a mathematical relationship, one which relates the expenses an organisation incurs on the quantity of ou
Direct control and Moral Suasion Without actually using the above weapons, the central bank can attempt simply to use "moral suasion" to persuade the commercial banks to restr
Q. Explain Mark-up pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules
if Q=120-2p is the equation for demand curve, find the compounding total, marginal and average revenue function
The institutional intervention theories Collective bargaining provides an example of what is sometimes called bi- lateral monopoly; the trade union being the monopolist suppli
The Spendthrift Economy This assumes a circular flow of income in a closed economy with no Government sector and no foreign trade. It also assumes the existence of two sect
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