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The production function can have many uses. It can be used to compute least-cost factor combination for a given output or maximum output combination for a given cost. Knowledge of production function can be helpful in deciding on the value of using a variable factor in the production process. As long as marginal revenue productivity of a variable factor exceeds its price, it would be profitable to increase its use. When marginal revenue productivity of factor becomes equal to its price the extra employment of the factor must be stopped. Because the production function demonstrates the returns to scale it would help in the decision making. If the returns to scale are diminishing, it's not worthwhile to increase production. Opposite would be true if returns to scale are increasing.
Demand management policies These policies are intended to increase aggregate demand and, therefore the equilibrium level of national income. They are sometimes called fiscal a
producer equllibrium
A mother is torn among choosing her son Leonardo and her daughter Meryl to have the last bar of chocolate in her cupboard. As both her children's needs the chocolate and she needs
Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. stion..
incremental raising
Barriers to entry in pure oligopoly The barriers to entry can be artificial or natural. Artificial Barriers This can be acquired through: State protection throu
Jeremy is an economics learner who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u
A risk-neutral agent's working life has two periods. In each period, the agent can provide high effort (at personal cost $2,000) or low effort (at zero personal cost). In a given p
In this question you will consider the impact on the building industry of the earthquake. Two construction and materials indices have been provided for the analysis. If your famil
(Kinky Demand Curve) Short Period Kinked demand curve was first used by Prof. Paul M. Sweezy to elucidate price rigidity under oligopoly. In an oligopoly market, firm knows that
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