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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?
The process of production needs several inputs. These inputs are known as the factors of production. In most cases, firms own some of the factors of production while some have to b
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