2. Consider the following graphical presentation as the optimal combination of a firm: Capital IC Labor Construct a single graphical presentation indicating the following conditions: a. Price of Labor increases but capital still the same. b. Two months after, both price of inputs declines proportionately. c. Five months after, the price of capital increases while the labor still the same.

2. Consider the following graphical presentation as the optimal combination of a firm: Capital IC Labor Construct a single graphical presentation indicating the following conditions: a. Price of Labor increases but capital still the same. b. Two months after, both price of inputs declines proportionately. c. Five months after, the price of capital increases while the labor still the same.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. Consider the following graphical presentation as the optimal combination of a
firm:
Capital
OLE
IC
Labor
Construct a single graphical presentation indicating the following conditions:
a. Price of Labor increases but capital still the same.
b. Two months after, both price of inputs declines proportionately.
c. Five months after, the price of capital increases while the labor still the
same.
d. Expansion path.
GE

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