E303lect28F09

E303lect28F09 - 30 October 2009 Lecture 28 Reading Ch 5 pp...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
30 October 2009 Lecture 28 Reading: Ch. 5, pp. 156-161 HW Problem Set #9. Due Monday REVIEW___________________________________________________ IV. Chapter 5. The Production Process and Costs B. The Production Function. 1 . Short Run Production. b. Relationships between Productivity Measures. MP drives AP c. Optimal Use of a Single Input. i. VMP PREVIEW___________________________________________________ ii. Rule iii. Comparative Statics 3. Long Run Production a. Optimal Use of Multiple inputs LECTURE__________________________________________________ c . Optimal Use of a Single Input ii. Rule: Profit Maximizing Input Usage : To maximize profits a manager should use an input L up to the point where VMP L is as close to w as possible without w exceeding VMP L . Example: L Q /∆ L = MP L P Q VMP L P L 0 - 1 4 100 400 300 2 6 100 600 300 3 8 100 800 300 4 6 100 600 300 5 4 100 400 300 6 2 100 200 300 7 0 100 0 300 8 -2 100 -200 300 iii. Comparative Statics .
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/12/2010 for the course ECON 303 taught by Professor Shrestha during the Fall '08 term at VCU.

Page1 / 3

E303lect28F09 - 30 October 2009 Lecture 28 Reading Ch 5 pp...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online