Consider a production process with two inputs and assume the level of one of the inputs is fixed in the short run. To determine the optimal level of the variable input you should:
A)solve the total cost equation for the level of the variable input.
B)solve the total cost equation for the level of the fixed input and substitute that into the production function.
C)solve the production function for the level of the fixed input.
D)solve the production function for the level of the variable input.

Question

Quizplus · Accepted Answer

Since one input is fixed, we need to determine the optimal level of the variable input to maximize output. This can be done by solving the production function for the level of the variable input, keeping the fixed input constant. Since one input is fixed in the short run, the optimal level of the variable input can be determined by solving the production function for the level of the variable input. This will give the maximum output that can be produced with the given amount of the fixed input, which can then be used to determine the optimal level of the variable input.

Consider a Production Process with Two Inputs and Assume the Level