Cost-minimizing firm-faced with constant input prices

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Reference no: EM13831322

Suppose that a cost-minimizing firm, faced with constant input prices, recently increase the quantity of each of its inputs by 10%. As a result, its output increased from 100 to 120 units. Indicate whether each for the following statements is true, false, or uncertain and explain your answer.

a) When y = 100, LAC is downward sloping.

b) If the firm had increase the quantity of each input by 5%, output would increase from 100 to 110 units.

Reference no: EM13831322

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