Let's consider the case where there are many inputs, two of which function exactly the same in

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Let's consider the case where there are many inputs, two of which function exactly the same in the production process. For instance, suppose that red apples with and without white spots can be used interchangeably to make identical tasting apple pie. Is there a unique cost-minimizing way to make apple pies? Suppose that both types of apples initially have the same price; then the price of the spotted ones increases. Which apples will be used after the price increase? Will the cost curve shift upward as a result of this price increase? How might the relationship between the two types of apples in the apple pie-making process be described?
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The Economics Of The Environment

ISBN: 9780321321664

1st Edition

Authors: Peter Berck, Gloria Helfand

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