Why inefficient to produce outside the ridge lines related to production isoquant?
Why inefficient to produce outside the ridge lines related to production isoquant?
Homework Answers
An isoquant has an elliptical or oval shape and it has a
rational area of operation between ridgelines. Production by the
firm can be done in the segments of isoquant that are convex to the
origin and lie between ridgelines.
The locus of the point of an isoquant is ridgelines where the
Marginal product of factors is zero.
The upper ridgeline indicates zero MP of product and the lower
ridgeline indicates zero MP of labor.
Thus, it is said that production techniques are efficient within
ridgelines and inefficient outside the ridgelines.
Factors have negative Marginal product and method of productions
are inefficient outside ridgelines.
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Why inefficient to produce outside the ridge lines related to
production isoquant?
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A firm has the production function ?= ?1/3?2/3.Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines. Now suppose that a different production function is given as: ?= 12−(27−?)1/3(8−?)2/3 where L and K is nonnegative. Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines. Suppose that the wage rate...
a. A firm has the production function X =L^1/3K^2/3. Does this production function have upper and...
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B) What happens to the MRTS as we move along an isoquant? How would you produce each level of out...
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Write a definition and draw a graph for the isoquant, assuming that the two factors of...
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