Question #5511

q=100+p-0.01p2+2n-0.03n2
determine the marginal rate of technical substitution.

Expert's answer

Marginal Rate of Technical Substitution (or Technical Rate of Substitution) is the amount by which the quantity of one input (n)& has to be reduced when one extra unit of another input (n2) is used, so that the total output (q) remains constant:

Dn/Dn2 = MP(n2)/MP(n) = -0.03/2= -0.015 – MRTS for the input n for n2

Dn/Dn2 = MP(n2)/MP(n) = -0.03/2= -0.015 – MRTS for the input n for n2

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Assignment Expert13.12.11, 14:20You are welcome

rabecca10.12.11, 04:30thank u.........

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