Price of capital have on the firms demand for labor
Course:- Microeconomics
Reference No.:- EM13700098

Assignment Help
Assignment Help >> Microeconomics

Consider a market in long-run equilibrium, where the firm’s mix of inputs is the cost-minimizing mix of inputs. a. Use a graph that includes isocosts and isoquants to illustrate cost minimization for a firm producing q units of output. b. Verbally explain the conditions that must be present for a firm to minimize its cost of producing a certain quantity of output. c. Holding output constant, illustrate and explain the effect a decrease in the price of capital has on the cost-minimizing mix of inputs. d. What effect, if any, does the decrease in the price of capital have on the firm’s marginal cost of production? Explain. e. Does a change in the price of capital affect the firm’s profit-maximizing output? Explain. f. What effect does a reduction in the price of capital have on the firm’s demand for labor? Use the analysis from above to explain your answer

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Microeconomics) Materials
In order to bring about a socially desirable quantity of landscaping service, what should the government do? Explain in words and show the effect of the government action
From Part 2 of the scenario, identify whether the copy center is facing a cost-push or demand-pull inflation and provide a rationale for your answer. Suggest a business s
This conclusion was based on data from a survey acknowledged to be unscienti?c, in which 34 out of the 43 people who chose to attend the budget workshop recommended raising
A free-market republican argues against the Pigouvian tax by pointing out that the conditions necessary for the Coase Theorem to produce an efficient equilibrium are present i
A manufacturer claimed that at least 20% of the public preferred her product. A sample of 100 persons is taken to check her claim. With α = .05, how small would the sample p
Suppose that the probability that a used bike is a lemon (low quality) is 'p' and the probability that a used bike is a plum (high quality) is '1-p'. If a buyer is willing t
Private and Public Goods) Distinguish among private goods, natural monopolies, open-access goods, and public goods. Provide examples of each. a. What is the external cost pe
Suppose New York wants to build a new facility to replace Madison Square Garden. Assume that the cost of building a new arena in midtown Manhattan is $2 billion and that all t