# Answer to Question #7460 in Economics of Enterprise for kiran

Question #7460

Given the production function:

Q = 100 + P – 0.01P2 + 2N – 0.03N2

Determine the marginal rate of technical substitution

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

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

Need a fast expert's response?

Submit orderand get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

## Comments

## Leave a comment