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Unformatted text preview: ss than) the long run “optimal” cost: 4 Is it always possible to read off a value for the optimal variable input? No. In this example the firm used one fixed and one variable input. If the firm used (any) number of fixed inputs but more than one variable input (for example
) then there may be
multiple values of the variable inputs that will, in conjunction with the fixed input(s), produce the target output. In such cases, we
can’t just “read off” numbers for the variable inputs and we would have to, sadly , solve the CMP.
ECO 204 Chapter 12: a Firm’s Cost Minimization Problem (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. Short Run CMP for a firm with Constraint Constraint Objective Having developed an intuitive feel for CMPs we now discuss an ingredient of any CMP: the price of inputs. 7
ECO 204 Chapter 12: a Firm’s Cost Minimization Problem (this version 2012-2013) University of Toronto, Department of...
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- Fall '14