Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Optimal Input Combination for Maximisation of Output?
Equilibrium conditions of the firm are identical to the above situation which is, iso-cost line must be tangent to the highest possible isoquant and isoquant should be convex. Though the present problem is theoretically different. In this case firm has to maximise its output for a given cost. This is elucidated in the figure:
Figure: Maximisation of Output
Firm's cost constraint is given by iso-cost line AB. The maximum level of output that firm can produce is Q2since the point 'e' lies on the isoquant Q2. Point 'e' is the equilibrium point since at this point the iso-cost line AB is tangent to the isoquant Q2. Other points on the isocost line which is S and T, lie on a lower isoquant Q1. Points to the right of 'e' indicate higher levels of output that are desirable, however aren't attainable because of the cost constraint. Therefore Q2 is the maximum output possible for given cost. The optimal combination of factors is OK1 and OL1.
The above analysis illustrates that optimal combination of inputs required for a firm to minimise the cost of producing a given level of output or to maximise the output for a given cost outlay is given at tangency point of an isoquant and is cost line.
The above analysis is based on constant factor prices. If factor prices change, firm will choose another factor combination which will minimise the cost of production for given output or maximise the level of output for a given cost
What are the important external forces Management has to identify all significant factors which influence a firm. These factors can largely be divided into two categories. Mana
Bain''s limit pricing theory advantages and disadvantages
Supply-side policies Supply-side policies are intended to increase the economy's potential rate of output by increasing the supply of factor inputs, such as labour inputs and
Properties of Indifference Curves An indifference curve is usually convex to the origin. Indifference curves slope downwards from left to right. A set
diagram of production function with one varaible
A firm's technology needsit to combine 5 person-hours of labor with 3 machine-hours to make 1 unit of output. The firm has 15 machines in place and the wage rate rises from $10 per
Practical Importance of the knowledge of Price Elasticity of demand The practical importance of the measures of elasticity of demand is to be appreciated in various ways:
Paper Money Due to the risk of theft, members of the public who owned such metal money would deposit them for safe keeping with goldsmiths and other reliable merchants who
what are the criticisms of it
1. Prof. Thomas "Generally the term Monopoly is used to cover any effective price control, whether of demand or supply of services or goods; hardly it is used to mean a combination
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd