Question #62950

1. The following graph shows one of a firm's isocost curves and isoquants.

a. At the economically efficient method of producing 4,000 units of output the MRTS will equal _________.

a. At the economically efficient method of producing 4,000 units of output the MRTS will equal _________.

Expert's answer

1a. If the following graph shows one of a firm's isocost curves and isoquants, then at the economically efficient method of producing 4,000 units of output the MRTS will equal MRTS = MP1/MP2,

where MP1 and MP2 are the marginal products of input 1 and input 2, respectively.

where MP1 and MP2 are the marginal products of input 1 and input 2, respectively.

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