Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Optimal Input Combination for Maximisation of Output?
Equilibrium conditions of the firm are identical to the above situation which is, iso-cost line must be tangent to the highest possible isoquant and isoquant should be convex. Though the present problem is theoretically different. In this case firm has to maximise its output for a given cost. This is elucidated in the figure:
Figure: Maximisation of Output
Firm's cost constraint is given by iso-cost line AB. The maximum level of output that firm can produce is Q2since the point 'e' lies on the isoquant Q2. Point 'e' is the equilibrium point since at this point the iso-cost line AB is tangent to the isoquant Q2. Other points on the isocost line which is S and T, lie on a lower isoquant Q1. Points to the right of 'e' indicate higher levels of output that are desirable, however aren't attainable because of the cost constraint. Therefore Q2 is the maximum output possible for given cost. The optimal combination of factors is OK1 and OL1.
The above analysis illustrates that optimal combination of inputs required for a firm to minimise the cost of producing a given level of output or to maximise the output for a given cost outlay is given at tangency point of an isoquant and is cost line.
The above analysis is based on constant factor prices. If factor prices change, firm will choose another factor combination which will minimise the cost of production for given output or maximise the level of output for a given cost
1. Prof. Marshall 'The more nearly perfect a market is, the stronger is the tendency for same price to be paid for same thing at the same time in all parts of the market". 2. Pr
the benefits of exchange in the light of the law of association, the introduction of money in direct exchange and way income gets distributed among market participants
Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs. 3 to 2
Q. What do you mean by Market Structure? Market economy pricing is conditioned by market structure. There are various forms of market structures. Perfect competition is accorde
Liquidity and the multiple contraction of deposits Many of the instruments of monetary policy depend upon limiting liquidity, which has a multiple effect upon bank' deposits t
Broader the range of other uses of a commodity, higher the price elasticity of its demand intended for the fall in price though less elastic for the increase in price. As price of
It is presumed that every of the different combinations of capital and labour displayed in Table produces the same level of output, which is, 20 units. Combinations are such that i
Let consider the economy (above) again where the following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4) for the prices (p 1 , p 2 , p 3 )=(1,
Q. Show the Long Term Goals - Demand forecast? Long Term Goals: If the demand forecast period is more than a year, in that scenario it's termed as long term forecast. Follow
Causes There are a number of explanations of the business cycle but changes in the level of investment seem to be the most likely. In the simplest Keynesian model an increase
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd