Question: A firm uses two inputs, K and L, in its production process and finds that no matter how much output it produces or how input

A firm uses two inputs, K and L, in its production process and finds that no matter how much output it produces or how input prices vary, it always minimizes its costs by buying only one or the other of the two inputs. Draw this firm’s isoquant map.

Step by Step Solution

★★★★★

3.50 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

If K and L are perfect substitutes only one ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

363-B-E-M-E (3610).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

A firm finds that no matter how much output it produces and no matter how input prices vary, it always minimizes its costs by buying half as many units of capital as of labor. Draw this firms...

A firm uses two inputs in production: capital and labor. In the short run, the firm cannot adjust the amount of capital it is using, but it can adjust the size of its workforce. What happens to the...

A firm uses two inputs, unskilled labor, L, and capital, K, to produce its product. The wage rate for one unit of labor is 5 while units of capital cost 20. (a) [7 marks] Graphically depict the...

5. A firm uses two inputs, K and L, in its production process and finds that no matter how much output it produces or how input prices vary, it always minimizes its costs by buying only one or the...

.Solve the following questions A firm uses two inputs, X and Y and its production function is Q = %(xy), where here we are using x and y to represent the quantities of the two inputs. (a) Calculate...

Kindly show your calculations 5. Jorge has an idea for a new product to help Econ 3101 students graph 3 dimensional functions (like utility functions and production functions!). Jorge has figured out...

Kindly solve showing each step c) Suppose that there is a 40% chance the wage will rise to $15 What are the new short-run profit maximizing inputs, output, and the associated profit?5. Jorge has an...

Help me solve the following questions.,,, Suppose a price taker firm faces market prices as follows: price of its output is p = 48, price of labor input is w = 16 and price of capital input is r = 1....

ABC company is a cost-minimizer and its aim is to produce a given output level at the smallest possible total cost. The firm uses two inputs labour (L) and capital (K) to make its output. a) Given...

Production. 1. Consider the Cobb-Douglas production function f(x,y) = 12x0.4y0.8. (A) Find the intensities (? and 1 ? ?) of the two factors of production. Does this firm have decreasing, increasing,...

Grinnell Lake Gift Shop has decided to price the candles that it sells at cost plus 80 percent. One type of carved bear-shaped candle costs $ 12, and huckleberry-scented votive candles cost $ 1.10...

Laser light of wavelength 510 nm is traveling in air and shines at normal incidence onto the flat end of a transparent plastic rod that has n =130. The end of the rod has a thin coating of a...

Why do workplaces so often lack creativity? What steps can managers take to increase the quality and quantity of their employees creative output?

A section of the fast-food market consists of 10 firms operating 1,840 restaurant locations across North America and currently has a Herfindahl-Hirschman Index (HHI) of 1,516. The market leader...

1. What is the value of a preferred stock that pays a perpetual dividend of $75 at the end of each year when the interest rate is 4 percent? 2. Levi Strauss & Co. paid $46,532 for a 110-year-old pair...

The X-Corporation produces a good (called X) that is a normal good. Its competitor, Y-Corp., makes a substitute good that it markets under the name Y. Good Y is an inferior good. a. How will the...

Good X is produced in a competitive market using input A. Explain what would happen to the supply of good X in each of the following situations: a. The price of input A increases. b. An excise tax of...

Suppose a firm has the following pro forma information: Sales: 1 8 , 0 0 0 , 0 0 0 Variable Costs: 6 , 0 0 0 , 0 0 0 Fixed Costs: 3 , 0 0 0 , 0 0 0 Depreciation: 4 , 0 0 0 , 0 0 0 Tax rate: 2 1 %...

ce Krystal. Krystal is a U.S.-based company that manufactures, sells, and installs water purification equipment. On April 11, the company sold a system to the City of Nagasaki, Japan, for...

______ 1. If a person dies without a valid will or fails to dispose of certain items of property in a will, the person is said to have died _____. ______ 2. A(n) ______ is a document that verifies...