Input substitution when the input price change, Microeconomics

Input Substitution When the Input Price Change

 Isoquants and Isocosts and Production Function

2278_production function.png

1616_input substitution.png

The minimum cost combination can be written as:

1726_input substitution1.png
- Minimum cost for a given output will occur when each dollar of input added to the production process will add an equivalent amount of output.

* Question

- If w = $10, r = $2, and MPL = MPK, which input would producer use more of?  Why? 

Posted Date: 10/12/2012 3:00:57 AM | Location : United States







Related Discussions:- Input substitution when the input price change, Assignment Help, Ask Question on Input substitution when the input price change, Get Answer, Expert's Help, Input substitution when the input price change Discussions

Write discussion on Input substitution when the input price change
Your posts are moderated
Related Questions
what is market equilibrium and disequilibrium?

What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities?

EXCHANGE RATES: The current unit focuses on exchange rates and is a more in-depth study of foreign exchange markets from the perspective of financialeconomics.You have been ac

Within analysis of perfect competition, we distinguish between the short run and the long run on the basis that use of some input factors is fixed in the short run, but variable in

Ask question #Minimum 1 00 words accepted#

Price Level:Overall average level of nominal prices in the economy can be calculated, most often as a weighted average of the prices of individualservices and goods (with weighting

How can we test adulterants in vegetable oils?

In November 2010, every Mzumbe University student had an income of 150000/= per month,facing the price of meal (X) 1000/= and average price of other goods (Y) 1000/=.The initial ut

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Healthcare Reform is currently in the news almost every day. The current approach proposes a government sponsored health insurance “market” to help control costs and make healthcar