Answer to Question #51613 in Microeconomics for Alice
To produce a recorded CD,q=1,the firm uses one blank disk,D=1,and the services of a recording machine,M=1,for one hour.
1)Draw an isoquant for this production process.
2)explain the reason for its shape.
Isoquant is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. While an indifference curve mapping helps to solve the utility-maximizing problem of consumers, the isoquant mapping deals with the cost-minimization problem of producers. Isoquants are typically drawn along with isocost curves in capital-labor graphs, showing the technological tradeoff between capital and labor in the production function, and the decreasing marginal returns of both inputs. To produce a recorded CD,q=1,the firm uses one blank disk,D=1,and the services of a recording machine,M=1,for one hour. So, in this case the isoquant will be shown as 2 perpendicular rays beginning from the point (1;1) with the optimal bundle in this point.
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