Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm isproducing in the short run, capital is fixed at K but capital is variable in the long run.K, CapitalKABQ3 IsoquantQ2 IsoquantQ₁ IsoquantL, LabourWhich of the following can we conclude?O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, Band C represent cost minimisation in the long run only.There are no points that represent cost minimisation in both the short run and the long run.Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only.Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in the long run only.Points D, B and E represent cost minimisation in both the short run and the long run, as they are all on the short run expansion path, but are also cost minimising points in the long run. PointsA and C only represent cost minimisation in the short run.

The Isoquant shows the different combinations of two inputs that produce the same level of output.…

Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is roducing in the short run, capital is fixed at K but capital is variable in the long run. D Q3 Isoquant Q₂ Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. O There are no points that represent cost minimisation in both the short run and the long run. O Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. O Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in the long run only.

Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is roducing in the short run, capital is fixed at K but capital is variable in the long run. D Q3 Isoquant Q₂ Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. O There are no points that represent cost minimisation in both the short run and the long run. O Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. O Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in the long run only.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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