Question

Explain the terms using a diagram

A Cobb-Douglas production function
Isoquants and isocosts
The long-run equilibrium

Answer 1

A Cobb-Douglas production function is a model that shows the relationship between production output and production inputs.

Isoquants shows combination of factors that produce a certain output while isocost show all combinations of factors that cost the same amount.

The long-run equilibrium occurs when marginal revenue equals marginal costs.