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Input Substitution When the Input Price Change
Isoquants and Isocosts and Production Function
The minimum cost combination can be written as:
- 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?
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Can marginal cost be constant? If so, does this mean that marginal cost are equal to average variable cost?
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Johnson Farms owns valuable farm land that allows it to produce wheat at a lower cost than its competitors. The company reports large profits each year on its accounting statements
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