What is the minimum cost of producing each level of output, Managerial Economics

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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 per unit.

a) Construct an expansion path.

b) How many units of each input are used to produce each level of output efficiently?

c) What is the minimum cost of producing each level of output?

d) Answer each question under the assumption that the price of labor is now Rs 2 a unit and the price of capital is Re 1 a unit.

 


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