Maximizing production follows the same mode as maximizing utility from earlier this semester instead of the various combinations of goods, it is the various combinations of labor and capital that can be used to produce the same level of output
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All inputs can be varied in the long run
Maximizing production follows the same mode as maximizing utility from earlier this semester instead of the various combinations of goods, it is the various combinations of labor and capital that can be used to produce the same level of output
Example: to dig a 10×10 x10 foot hole you can use 10 workers with 10 shovels or one worker with a backhoe Isoquant curves = indifference curves (graph page 261) as you move up or down the curve, you substitute capital for labor a producer tries to reach the highest isoquant ( highest level of production ) possible .
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