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Unformatted text preview: (2) Logic and example. By carrying out the above computations for each level of output, we can derive the minimum variable costs for each level of output. The resulting relationship of TVC to Q is the total variable cost curve. What happens if the price of an input changes? (Say the price of labor falls.) Application: Allocation of Production among Multiple Plants Yet another approach. Maximize output for each level expenditures. Rearrange Equation (1) as: (3) or, maximum output, given expenditures, is obtained when the marginal product of an input per dollar spent on the input is the same. Bryan L. Boulier, 2011. All rights reserved....
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This note was uploaded on 03/16/2011 for the course ECON 101 taught by Professor Fon during the Spring '06 term at GWU.
 Spring '06
 FON
 Microeconomics

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