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. Total cost of Factor Combinations?
Here we try to find total cost of every factor combination and choose the one that has the least cost. Cost of every factor combination is found by multiplying the price of each factor by its quantity and then summing it for all inputs. This is explained in Table below.
Table: Choosing the Lowest Cost of Production Technique
Technique
Capital
(units)
Labour
Capital Cost
Rs.
Labour Cost
Total Cost
1
2
3
4
5
6
A
10
500*6=3000
400*10=4000
7000
B
14
500*2=1000
400*14=5600
6600
It is presumed that 100 pairs of shoes are produced per week and price of capital and wage of labour are 500$ and 400$ per week respectively. In order to make analysis, we presume that there are only two technically efficient methods of producing shoes and they are labelled A and B.
The table illustrates that total cost of producing 100 pairs of shoes is7000$ per week by using technique A and 6600$ per week using technique B. Firm will choose technique B that is an economically efficient (or lowest cost) production technique at the factor prices presumed in the above illustration.
If either of the factor prices alters equilibrium proportion of the factors would also change so as to use less of those factors which display a price rise. Consequently we will have a new optimal combination of factors. This can again be found out by calculating cost of different factor combinations with new factor prices and choosing the one which costs the least.
Define scarcity and opportunity cost. Show how these concepts are useful in managerial decision making
1.Is Indian companies running a risk by not giving attention to cost cutting?
A MATHEMATICAL APPROACH TO REVENUE AND COST FUNCTIONS Recall that TR = P x Q This implies that P(AR) = TR Q For example, assuming
the overall idea of market segmentation
What is advertising elasticity? Explain
Q. Types of production function? Production function is of two different forms: The variable proportion production function The fixed proportion production functio
Q. Show the Fixed Proportion Production Function? A fixed proportion production function is one in that technology needs a fixed combination of inputs, say labour and capital,
Appropriate Management of Sales: Demand forecasts are made area wise and after that sales targets for various areas are set in view of that. This helps the calculation of sales pe
Producers Equilibrium or Optimal Combination of Inputs The analysis of production function has demonstrated that alternative combinations of factors of production that are tech
when firm can achieve optimization
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