Given two inputs X1 and X2 with prices W1 and W2 respectively and a production function Y=f(X1,X2), show that cost minimisation implies that the marginal rate of substitution between the inputs X1 and X2 is equal to the ratio of the two inputs prices
Given two inputs X1 and X2 with prices W1 and W2 respectively and a production function Y=f(X1,X2), show that cost minimisation implies that the marginal rate of substitution between the inputs X1 and X2 is equal to the ratio of the two inputs prices
Algebra and Trigonometry (MindTap Course List)
4th Edition
ISBN:9781305071742
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter2: Functions
Section2.4: Average Rate Of Change Of A Function
Problem 4.2E: bThe average rate of change of the linear function f(x)=3x+5 between any two points is ________.
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Given two inputs X1 and X2 with prices W1 and W2 respectively and a production function Y=f(X1,X2), show that cost minimisation implies that the marginal rate of substitution between the inputs X1 and X2 is equal to the ratio of the two inputs prices
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