Managerial Economics
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Transcript of Managerial Economics
![Page 1: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/1.jpg)
PRODUCTION THEORYPRODUCTION FUNCTIONS WITH TWO VARIABLE
INPUTS
Reported by: Nino Reiner F. Badiola
PLM MBA 6
Managerial EconomicsDr. Carlos Manapat
![Page 2: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/2.jpg)
DISCUSSION
• Isoquant Curves• Marginal Rate of Technical Substitution
(MRTS)• Isocost Lines• Least Cost Combination
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PRODUCTION ISOQUANTS
• The term Isoquant derived from Iso, meaning Equal, and Quant, from Quantity.
• Curves showing all possible combination of inputs that yield the same output.
• Locus of points showing that different combinations of factor-inputs give the same quantity of output.
• Equal Product Curve
![Page 4: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/4.jpg)
INPUT COMBINATION
![Page 5: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/5.jpg)
PRODUCTION ISOQUANT
![Page 6: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/6.jpg)
EFFICIENT COMBINATION
![Page 7: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/7.jpg)
MARGINAL RATE OF TECHNICAL SUBSTITUTION (MRTS)
• The rate at which one input may be substituted for another input in the production process, while total output remains constants.
• Amount of one input factor that must be substituted for one unit of another input factor to maintain a constant level of output.
• Algebraically,MRTS = ΔY / ΔX
![Page 8: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/8.jpg)
MRTS
![Page 9: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/9.jpg)
ISOCOST LINES
![Page 10: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/10.jpg)
COST MINIMIZATION SUBJECT TO AN OUTPUT CONSTRAINTS
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OUTPUT MAXIMIZATION SUBJECT TO A COST CONSTRAINTS
![Page 12: Managerial Economics](https://reader033.fdocuments.in/reader033/viewer/2022061121/5468619db4af9f9b538b4a1b/html5/thumbnails/12.jpg)
Thank you!