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SupplySide-Introduction

SupplySide-Introduction - Application Allocation of...

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Unformatted text preview: Application: Allocation of Production among Multiple Plants !"#\$%&'(&!)*+,-" ./)%)0,/1&232 Yet another approach. Maximize output for each level expenditures. Handout 5: The Supply Side & Short Run Costs Supply Side-Introduction Rearrange Equation (1) as: I. Introduction 4-5,%,6,)%&)5&7,"08&7,"01&\$"-&,%16,6*6,)%1&69\$6&6"\$%15)"0&"-1)*"/-1&,%6)&:));1 (3) <*"/9\$1-;&=#&/)%1*0-"1>&)69-"&5,"01&\$%;&:)?-"%0-%6( @)0<)%-%61&)5&7,"018& 2(&&AB%-"1&C&"-/-,?-&<")5,61&\$%;&=-\$"&+)11-1 or, maximum output, given expenditures, is obtained when the marginal product of an input D(&&E\$%\$:-"1&C&;\$#C6)C;\$#&;-/,1,)%0\$F,%: per dollar spent on the input is the same. G(&&H)"F-"1 I(&&J11-61 A":\$%,K\$6,)%8&& 2(&&L)+-&<")<",-6)"19,< D(&&M\$"6%-"19,< G(&&@)"<)"\$6,)% N)\$+1&)5&7,"018 2(&&M")5,6&0\$O,0,K\$6,)% D(&&A69-"&:)\$+1 H-&B,++&5)/*1&)%&<")5,6C0\$O,0,K\$6,)%&\$1&\$&:)\$+( J(&&M"-;,/61&=-9\$?,)"&)5&5,"01&B-++ !(&&E\$%\$:-"1&/)0<-%1\$6,)%&6,-;&6)&<")5,61&)5&5,"01 @(&&L*"?,?\$+&9#<)69-1,18&7,"01&/\$%&%)6&,%;-5,%,6-+#&,%/*"&+)11-1(&&7,"01&69\$6 ;)&:)&)*6&)5&=*1,%-11>&1)&69\$6&1*"?,?,%:&5,"01&\$"-&;)0,%\$6-;&=#&69)1-&69\$6 9\$?-&0\$%\$:-;&6)&9\$?-&\$;-P*\$6-&<")5,6\$=,+,6#( © Bryan L. Boulier, 2011. All rights reserved. ...
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