Production Theory: Cost Minimization Part 1

Download the worksheet at www.burkeyacademy.com under files, called IM Production Theory Example.PDF returns to scale, input demand functions, marginal rate of technical substitution, isocosts, isoquants,etc.

[@ericchoe8801]

how did you get .000001Q^3? I'm confused.

[@BurkeyAcademy]

I distributed the exponent on (Q/215.44)^3 = Q^3/215.44^3. 1/215.44=.0000001. So, Q^3/215.44^3 = Q^3 times .0000001.

[@sami-samim]

F is fuel or labor? A bit confusing here.

[@BurkeyAcademy]

Here the idea is that a big power station doesn't use much labor, so the two primary inputs are Fuel and Kapital.