A Linear isoquant implies perfect substitutability between the two inputs K and L. The isoquant AB indicates that a given quantity of a product can…

In order to determine the best combination of capital and labor to produce that output, one has to know the amount of finance available to…

When a production function assumes a fixed proportion between K and L, the isoquant takes ‘L’ shape. Such an isoquant implies zero substitutability between K…

Almost all the firms have more than one product in their line of production. Even the most specialized firms produce a commodity in multiple models,…

The large size firms divide their operation very often into product decisions or subsidiaries. Growing firms add new divisions or departments to the existing ones….

Average cost pricing is also is also known as “make-up Pricing” or “Cost plus pricing” . Average cost pricing is the most common method of…

According to Baumol, every business firm aims at maximization it sales revenue (price x quantity0 rather than its profit. Hence his hypothesis has come to…