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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.
a bus operates two routes,one to harare and another one to johanesburg.the company analyst estimated that the elasticity of demand for joburg is 0.9 while for harare is 2.the compa
Monetary Policy Meaning of Economic Growth: The primary function of an whether socialist or capitalist is to satisfy people maximum wants. It must produce consumer goods to make
ISOQUANT ANALYSIS In the long run it is possible for a firm to produce the same output using different combinations of two factors of production. For instance it the two fact
PRODUCT DIFFERENTIATION Product differentiation describes a situation in which there is a single product being manufactured by several suppliers, and the product of each su
Q. Explain about Transaction Cost Theory? The below model reveals market and institutions as a possible form of organisation to coordinate economic transactions. When external
In regards to air pollution, use a diagram to show and explain how the existence of pollution can make the market equilibrium inefficient.
Explain about the equilibrium in the labor market. Equilibrium into the Labor Market: All of firm will hire labor up to the point at that the value of the marginal product o
The following represents the section headers you should consider for your reasoned document. Each section should have (at least) two research citations to support your work :
what is meant by equi-marginal concept
The acme paper company lowers its price of envelopes (1000 count) from $6to $5.40.
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