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Lecture

1.3- Production Theory.pdf

1 Page
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Department
Economics
Course Code
EC260
Professor
Olivia Mesta

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Description
In addition to determining the demand for a product managers must determine the optimum amount to producemust make efficient use of inputsminimize costsmax profitMaximum when APMPIsoquantscurve that shows all efficient bundles capable producing a given level of outputPropertiesrepresents1 the farther from the origin an isoquant is the higher the output it 2 Each isoquant reflects an infinite number of input combinations3 they are downward sloping and convex to the origin4 If the production process uses inputs i fixed proportions then no substitutes are possible and isoquants are right angles55 textbook5 If inputs are perfectly substitutable then isoquants ar
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