Optimum combination of resources, Managerial Economics

Assignment Help:

Optimum combination of resources

The firm can maximise output given costs.  That is when the entrepreneur attains the highest isoquant given a particular Isocost.

1460_optimum combination of resources.png

At the point of tangency the absolute slope of Isoquant will be equal to the slope of the Isocost.  Two conditions should however prevail, namely:

i.   The necessary condition is that

                        w/r  = MPL/MPk                    or       MPL/PL   =    MPk/Pk

ii. The sufficient condition is that the Isoquant must be convex to the Isocost point of Tangency.

 

1653_optimum combination of resources1.png


Related Discussions:- Optimum combination of resources

How advertising expenditure must remain the same, Advertising expenditure m...

Advertising expenditure must remain the same If advertising expenditure of a firm increases, consumers may be tempted to buy more of its product. Hence the advertising expendit

Increemental principle, asumption and limitation of increemrntal,oppurtunit...

asumption and limitation of increemrntal,oppurtunity cost

Contracting and insider-outsider models of unemployment, CONTRACTING AND IN...

CONTRACTING AND INSIDER-OUTSIDER MODELS OF UNEMPLOYMENT   From  the  Walrasian  assumption  of  a market-clearing wage  on  efficiency considerations  -  it was  postulated  th

Type of economic system, Question 1: (a) Briefly explain and distingui...

Question 1: (a) Briefly explain and distinguish between a centrally planned, laissez-faire and mixed economy. (b) According to you, which kind of economic system is most d

Household, Household This refers to all the people who live under one ...

Household This refers to all the people who live under one roof and who make or are subject to others making for them, joint financial decisions. The household decisions are a

Economic cost, The economic cost Unemployment represents a terrible wa...

The economic cost Unemployment represents a terrible waste of resources and means that the economy is producing a lower rate of output than it could do if there were full empl

Cheapening of materials and equipments, Q. Cheapening of Materials and Equi...

Q. Cheapening of Materials and Equipments? Expansion of an industry increases the demand for different kinds of materials and capital equipments. This will result in large scal

Monopoly, features of monopoly?

features of monopoly?

Cheap labour - reason for protection, Cheap Labour   It is often argu...

Cheap Labour   It is often argued that the economy must be protected from imports which are produced with cheap, or 'sweated", labour.  Some people argue that buying foreign

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd