Question: Explain using graphs, math and words (i.e. the Isoquant and Isocost Curves with everything labeled correctly) what the incentive the firm faces is when

Explain using graphs, math and words (i.e. the Isoquant and Isocost Curves

Explain using graphs, math and words (i.e. the Isoquant and Isocost Curves with everything labeled correctly) what the incentive the firm faces is when internally optimizing the amount of Capital and Labor to employ. Assume that the firm is a RETAILER with a production function: q = k18 Introduce multiple input-bundles; one at the optimum combination of K & L, and one that isn't at the optimum, and show what the firm will do and why. Explain your graph in words and mathematics, using the key mathematical relationships we've identified to represent the incentives faced by the firm.

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To understand the firms incentive when internally optimizing the amount of capital K and labor L to employ we will use isoquant and isocost curves 1 Isoquant Curve An isoquant curve represents all the ... View full answer

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