Answer to Question #153123 in Microeconomics for Salah yahye

Question

1.With well illustrated diagrams, show and clearly explain:

a)How a firm maximizes profits given cost constraints

b)Minimizes costs given level of output

c)How relative factor prices and factor productivity determine optimal input combination. Show clearly how the maximizing output and optimal inputs combinations are achieved in the two cases.

Answer 1

a)

b)

c)