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Cost minimizing input mix - PowerPoint PPT Presentation

X = 10

? Charles van Marrewijk. K. B. 21. 15. A. X = 14. X = 10. L. 0. 5. 7. Constant returns to scale, 1. Suppose 5 labor and 15 capital can produce 10 X. This is the isoquant associated with point A.

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X = 10

K. B. 21. 15. A. X = 14. X = 10. L. 0. 5. 7. Constant returns to scale. Suppose 5 labor and 15 capital can produce 10 X. This is the isoquant associated with point A. Under constant returns to scale a proportional increase in inputs leads to a proportional increase in output.

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202 views • 4 slides

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Cost minimizing input mix - PowerPoint PPT Presentation

X = 10

X = 10