Optimal combination of factors of production
Problem: How does a firm choose the optimal combination of factors of production when it wants to minimise costs for a given output, and when it wants to maximise output for given cost?
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By using the information presented, asnwer the following question. A monopoly faces the following demand curve and total cost curve:
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How does a firm choose the optimal combination of factors of production when it wants to minimise costs for a given output, and when it wants to maximise output for given cost?
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1) Graph the fixed cost, variable cost total cost curves for these data. 2) What is the marginal product of going from two to three units of labor?
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