Uses of production function, Managerial Economics

Assignment Help:

The production function can have many uses. It can be used to compute least-cost factor combination for a given output or maximum output combination for a given cost. Knowledge of production function can be helpful in deciding on the value of using a variable factor in the production process. As long as marginal revenue productivity of a variable factor exceeds its price, it would be profitable to increase its use. When marginal revenue productivity of factor becomes equal to its price the extra employment of the factor must be stopped. Because the production function demonstrates the returns to scale it would help in the decision making. If the returns to scale are diminishing, it's not worthwhile to increase production. Opposite would be true if returns to scale are increasing.


Related Discussions:- Uses of production function

Homework, 1. What does a MNC have to consider that a domestic company does ...

1. What does a MNC have to consider that a domestic company does not, and how does this impact capital budgeting? in addition to the complications encountered in doing a capital bu

Monopolistic practices, MONOPOLISTIC PRACTICES The following practices...

MONOPOLISTIC PRACTICES The following practices may be said to characterize monopolies. Exclusive dealing to supply and collective boycott Producers agree to supply onl

Demerits of direct taxes, Demerits of direct taxes a. Heavy direct tax...

Demerits of direct taxes a. Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to productivity by encouraging absenteeism

BREAK EVEN ANALYSIS, WRITE A NOTE ON BREAK -EVEN ANALYSIS IN PROFIT MANAGEM...

WRITE A NOTE ON BREAK -EVEN ANALYSIS IN PROFIT MANAGEMENT

Marijuana, Plot the demand schedule and draw the demand curve for the data ...

Plot the demand schedule and draw the demand curve for the data given for Marijuana in the case above.

Explain the point elasticity, Point elasticity The point elasticity of ...

Point elasticity The point elasticity of demand is described as the proportionate change in quantity demanded in response to a very small proportionate change in price. The con

Short run production function, Explain the short-run production function wi...

Explain the short-run production function with one variable input with the help of assumed figures. Clearly indicate the three stages of physical product, using table and graphs.

Supplementary reserve, Supplementary Reserve, Requirements/Special Deposit ...

Supplementary Reserve, Requirements/Special Deposit If the Central Bank feels that there is too much money in circulation, it can in addition require commercial banks to mainta

What is the arc price elasticity of demand, 1.  Joe is evaluating the marke...

1.  Joe is evaluating the marketing strategy at his restaurant and inn. Suppose that in response to a $2.00 off sales promotion for spaghetti dinners, Joe finds that nightly dinner

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd