1) Show the average product and marginal product curves for a business. Also show and label...

1) Show the average product and marginal product curves for a business. Also show and label the point of diminishing returns, the axes, and the curves.

2) Explain briefly the relationship between an isocost line and an isoquant. Make sure to explain what the two curves represent and the relationship between the two at the optimal cost minimization point. A graph may be helpful in your explanation.

Please help me with these 2 questions and draw the graphs for both of them!

Expert Solution

Q2) Isoquant is the locus of points which shows combination of factors which give same level of output . Isoquant is like indifferenc curve of producers which give combination of factors giving same level of output.

Iso cost - shows all the combination of factors which costs same that is amount of cost on the purchase is equal

It is like the budget line of producers which gives different combination which can be produced at same costs.

optimal cost minimization point is where slope of an isocost is equal to isoquant. As a firm wishes to produce at the point of the highest possible isoquant and minimum possible isocost

Rahul Sunny answered 2 years ago

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