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.
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.9P
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