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
Indian industry has progressed a lot because of globalization. A lot of development has been seen in Indian industry.
Goverment Banker, Fiscal Agent and Adviser Central banks in all countries acts as the fiscal agent, banker and adviser on all important financial matters to government of thei
Northern Lumber operates a large lumber-processing mill in a small town in Washington State. It is one of the larger lumber producers in the region and has some market power in th
principles of time perspectives
Buffer stocks and stabilization funds In this case the government buys up part of the supply when output is excessive, stores this surplus, and resells it to consumers in time
who are the contributors in economics and what they contribute in economics
firms both in monopolistic and perfect competition tend to make normal profits but why do they criticize only monopolistic competition
In the short-run the firm can't modify or change overhead factors like equipment, plant and scale of its organisation. In the short-run output can be decreased or increased by chan
Movements along the supply curve Movements along the supply curve are brought about by changes in the price of the commodity. When price increases from P1 to P2, quant
Question: EITHER Nowadays, there is an urgency in Mauritius to introduce a rapid transit system in order to reduce traffic congestion and shift towards a more efficient mode
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